Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q1 FY2021 Earnings Presentation
37 slides from Mahindra & Mahindra Financial Services's earnings presentation, Jul 18, 2020
Slide 1: Cover letter to stock exchanges
. Mahindra & Mahindra Financial Services Ltd. Mm cl h | n cl | | Fl NAN CE Mahindra Towers, 4" Floor, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 66526000 Fax: +9122 24984170 +91 22 24984171 18 July, 2020 The General Manager-Department of The Manager-Listing Department, Corporate
Slide 2: Quarter Result Update June - 2020
Mahindra & Mahindra Financial Services Limited Quarter Result Update June - 2020 Corporate Office: Regd. Office: Mahindra Towers, 4th Floor, Gateway Building, Apollo Bunder, Dr. G. M. Bhosale Marg, Worli, Mumbai-400 001, India Mumbai-400 018, India Tel: +91 22 2289 5500 Tel: +91 22 66526000 Fax:+91
Slide 3: Transforming rural lives across the country
Company Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 2
Slide 4: Company Background
Company Background Parentage: Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 732 billion)* About MMFSL: MMFSL (Mcap: Rs 128 billion)*, one of India’s leading non-banking finance companies focused in the rural and semi-urban sector
Slide 5: MMFSL Group structure
MMFSL Group structure (1) 80% Mahindra Insurance Brokers Limited (“MIBL”) Mahindra & Mahindra Limited 98.43%(2) Mahindra Rural Housing Finance Limited (“MRHFL”) 51.19% 49% Mahindra Finance USA LLC (Joint venture with Rabobank group subsidiary) 51%(3) Mahindra Manulife Investment Management Mahindra
Slide 6: Our Journey
Our Journey Commenced housing finance Maiden Retail NCD Issue business through MRHFL Maiden QIP Issue of Rs. 4.26 Bn of Rs. 1000 crores. Oversubscribed over 7 Raised Rs. 4.14 Bn through JV with Rabobank subsidiary for times over base issue size Private Equity tractor financing in USA Long term debt
Slide 7: Shareholding Pattern (as on 30th June, 2020)
Shareholding Pattern (as on 30th June, 2020) Shareholding Pattern Top 10 Public Shareholders HDFC Life Insurance Company Limited 11.85% Valiant Mauritius Partners Offshore Limited Life Insurance Corporation Of India 13.10% Wishbone Fund, Ltd. 51.19% Buena Vista Asian Opportunities Master F
Slide 8: Transforming rural lives across the country
Company Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 7
Slide 9: Business Strategy
Business Strategy Grow in rural and semi urban markets for vehicle and automobile financing Expand Branch Network Leverage existing customers base through Direct Marketing Initiatives Diversify Product Portfolio Broad base Liability Mix Continuing to attract, train and retain talented employees Effe
Slide 10: Extensive Branch Network
Extensive Branch Network Extensive branch network with presence in 27 states and 7 union territories in India through 1,324 offices Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of 2 20 35 28 20 1,284 1,322 1,324 35 19 3 2 1,182 77 128 40 1 893
Slide 11: Diversified Product Portfolio
Diversified Product Portfolio Loans for auto and utility vehicles, tractors, cars, commercial vehicles and construction Vehicle Financing equipments Pre-Owned Vehicles Loans for pre-owned cars, multi-utility vehicles, tractors and commercial vehicles Loans for varied purposes like project fina
Slide 12: Employee Management and Technology Initiatives
Employee Management and Technology Initiatives Employee engagement & training Technology initiatives Training programs for employees on regular basis All our offices are connected to the centralised data centre in Mumbai through Lease line/tablets 5 days induction program on product knowledge,
Slide 13: Break down of estimated value of Assets Financed
Break down of estimated value of Assets Financed on standalone basis Quarter ended Quarter ended Year ended Asset Class June – 20 June – 19 March – 20 Auto/ Utility vehicles 23% 27% 28% Tractors 34% 17% 17% Cars 15% 20% 19% Commercial vehicles and Construction equipments 6% 18% 15% Pre-owned vehicle
Slide 14: Break down by Geography
Break down by Geography on standalone basis West Central CENTRAL 15% 10% 12% WEST 27% East EAST South Loan Assets Disbursement 22% 26% 1Q FY2021 20% as on June, 2020 SOUTH 14% North NORTH 29% 25% NORTH: Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Rajasthan, Uttar Pradesh
Slide 15: Credit Rating
Credit Rating MMFSL believes that its credit rating and strong brand equity enables it to borrow funds at competitive rates Credit Rating India Ratings Outlook IND AAA Long term and Subordinated debt (incl. MLD); Bank Facilities Stable IND PP-MLD AAA emr Short term debt IND A1+ -- CARE Ratings Outlo
Slide 16: Broad Based Liability Mix
Broad Based Liability Mix on standalone basis All figures in INR million Working Capital Consortium Facility at Rs. 20,000 mn. comprising several banks Funding Mix by type of Instrument (Mar’20) Funding Mix by type of Instrument (Jun’20) ICD (CP - Nil), CP, ICD, 1,400 Securitization , 20,808 Securit
Slide 17: ALM Position and Liability Maturity
ALM Position and Liability Maturity All figures in INR billion 140 Cumulative Mismatch Cumulative Surplus (%) 70% 120 - Positive (INR bn.) 115.8 60% 100 50% 78.2 80 67.4 40% 60 30% 39.3 40 33.7 20% 20.4 20 14.3 10% 0 0% Upto Upto Upto Upto Upto Upto Upto 1 month 2 months 3 months 6 months 1 year 3 y
Slide 18: Transforming rural lives across the country
Company Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 17
Slide 19: Key Financials
Key Financials on standalone basis Total Income Profit after Tax Value of Asset Financed Q1 FY 21 Rs. 26,549 mn Rs. 1,558 mn Rs. 34,892 mn 10% 128% 67% Q1 FY 20 Rs. 24,125 mn Rs. 684 mn Rs. 105,983 mn on consolidated basis Q1 FY 21 Rs. 30,687 mn Rs. 4,321 mn Rs. 34,892 mn 8% 298% 69% Q1 FY 20 Rs. 28
Slide 20: Growth Trajectory
Growth Trajectory on standalone basis Loan Book (1) (Rs. Bn) Revenues (Rs. Bn) IND-AS IND-AS 102.45 649.93 88.10 612.50 623.96 638.40 66.85 485.47 24.13 26.55 FY18 FY19 FY20 Q1FY20 Q1FY21 FY18 FY19 FY20 Q1FY20 Q1FY21 Profit after Tax (2) (Rs. Bn) Book Value Per Share (3) (Rs.) IND-AS IND-AS 15.57 10
Slide 21: Financial Performance
Financial Performance on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) IND-AS IND-AS 2.6% 43.6% 39.8% 2.2% 38.0% 37.3% 1.3% 24.9% 0.8% 0.4% FY18 FY19 FY20 Q1FY20 Q1FY21 FY18 FY19 FY20 Q1FY20 Q1FY21 Return on Net Worth (RONW) (%) Asset Quality (%) IND-AS IND-AS Gross NP
Slide 22: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in Million) Q1FY21 Q1FY20 Y-o-Y FY 20 Revenue from operations (A) 26,405 23,940 10.3% 100,979 Less: Finance cost (B) 12,646 11,282 12.1% 48,288 NII (C= A+B) 13,759 12,658 8.7% 52,691 Other Income (D) 144 185 -21.9% 1,473 Total Income (E=C+D) 13,903 1
Slide 23: Selected Balance Sheet items (Standalone)
Selected Balance Sheet items (Standalone) Particulars (Rs. in Million) As on Jun 30, 2020 As on Jun 30, 2019 As on Mar 31, 2020 Selected Financial Assets Cash and cash equivalents 15,013 2,735 6,768 Bank balance other than (a) above 7,552 5,365 7,490 Loans 638,395 623,965 649,935 Investments 97,828
Slide 24: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in Million) Q1FY21 Q1FY20 Y-o-Y FY20 Revenue from operations (A) 30,566 28,219 8.3% 118,830 Less: Finance cost (B) 14,012 12,626 11.0% 53,906 NII (C= A+B) 16,554 15,593 6.2% 64,924 Other Income (D) 121 165 -27.1% 1,135 Total Income (E=C+D) 16,675 1
Slide 25: Selected Balance Sheet items (Consolidated)
Selected Balance Sheet items (Consolidated) Particulars (Rs. in Million) As on Jun 30, 2020 As on Jun 30, 2019 As on Mar 31, 2020 Selected Financial Assets Cash and cash equivalents 16,855 4,538 7,826 Bank balance other than (a) above 7,552 5,365 7,490 Loans 716,235 702,688 728,638 Investments 97,53
Slide 26: Summary & Key Ratios
Summary & Key Ratios on standalone basis As per IND-AS Quarter ended Quarter ended Year ended Particulars June – 20 June – 19 March – 20 RONW (Avg. Net Worth) 5.3% 2.5% 8.1% Debt / Equity 5.49:1 4.99:1 5.23:1 Capital Adequacy$ 19.6% 19.4% 19.6% Tier I 15.3% 14.9% 15.4% Tier II 4.3% 4.5% 4.2% EPS (Ba
Slide 27: Spread Analysis
Spread Analysis on standalone basis As per IND-AS Quarter ended Quarter ended Year ended Particulars June – 20 June – 19 March – 20 Total Income / Average Assets 14.0% 14.2% 14.5% Interest / Average Assets 6.7% 6.6% 6.8% Gross Spread 7.3% 7.6% 7.7% Overheads / Average Assets 1.8% 3.3% 2.9% Write off
Slide 28: NPA Analysis (on Business Assets)
NPA Analysis (on Business Assets) on standalone basis Particulars (Rs. in Million) except figures in % As on Jun 30, 2020 As on Jun 30, 2019 Mar 31, 2020 Business Assets (including Provisions) 676,718 648,200 680,890 Gross NPA (Stage 3) 62,184 52,952 57,467 Less: ECL Provisions (Stage 3) 24,922 13,1
Slide 29: Transforming rural lives across the country
Company Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 28
Slide 30: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Accounting Basis As per IND-AS Quarter ended Quarter ended Year ended Particulars (Rs. million) except figures in % June – 20 June – 19 March – 20 Loans disbursed Nil 4,976 18,764 No. of Customer Contracts (nos.) Nil 24,911 95,523 Loans & Advances (net) 77,838
Slide 31: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Accounting Basis As per IND-AS Quarter ended Quarter ended Year ended Particulars (Rs. million) June – 20 June – 19 March – 20 Total income 412 796 3,369 PBT 27 88 739 PAT 20 62 534 Business Area: Licensed by IRDA for undertaking insurance broking in Life, Non-Li
Slide 32: Transforming rural lives across the country
Company Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 31
Slide 33: Awards and Accolades
Awards and Accolades ■ Awarded the Indian Oil Logistics Award CV Financer of the Year 2019; ■ Awarded the 1st position for Excellence in Cost Management – 2018 at the 16th National Awards for “Excellence in Cost Management – 2018” in Banking, Financial Services and Insurance Category; ■ Awarded the
Slide 34: Transforming rural lives across the country
Company Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 33
Slide 35: Risk Management Policies
Risk Management Policies Provisioning Norms Stage Description Provision Mechanism Stage 1 0- 30 days past due PD * LGD * Stage 1 Asset Stage 2 > 30 to <= 90days past due PD * LGD * Stage 2 Asset Stage 3 > 90 days past due LGD * EAD of Stage 3 Asset* *Fair valued at reporting date PD – Probability of
Slide 36: Disclaimer
Disclaimer This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Mahindra & Mahindra Financial Services Limited (the “Company”), nor shall it or any part of it or
Slide 37: Thank You
Thank You Transforming rural lives across the country 36
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