Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q1 FY2024 Earnings Presentation
52 slides from Edelweiss Financial Services's earnings presentation, Aug 4, 2023
Slide 1: Exchange filing cover letter: Earnings Update
EW/Sec/2023-24/107 August 4, 2023 BSE Limited National Stock Exchange of India Limited P J Towers, Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E), Mumbai – 400 001. Mumbai – 400 051. Scrip Code: 532922 Symbol: EDELWEISS Dear Sir/Madam, Sub: Earnings Update Please find enclosed
Slide 2: Earnings update – Quarter ended Jun 23
Edelweiss Financial Services Limited Earnings update – Quarter ended Jun 23
Slide 3: Contents
Contents 1 Overview for quarter ended Jun 23 3 2 Performance highlights 6 3 Update on key priorities 11 4 Business performance 21 5 Governance & corporate responsibility 56 Please refer to the following business updates filed for more details on our insurance businesses – • General Insurance • Life
Slide 4: Overview – Quarter ended Jun 23
Overview Quarter ended Jun 23
Slide 5: Edelweiss at a glance – Quarter ended Jun 23
Edelweiss at a glance – Quarter ended Jun 23 Net Worth Ex-Insurance PAT BVPS INR 6,230 Cr INR 110 Cr INR 46 (FV ₹1) Net Debt Liquidity as a % of Debt INR 15,380 Cr 12% 4
Slide 6: Diversified with high-quality and well-capitalised businesses
Diversified with high-quality and well-capitalised businesses Edelweiss Financial Services Ltd (EFSL) Asset Management Credit Insurance Asset Alternative Reconstruction Housing General Mutual Fund NBFC Life Insurance Asset Mgt Finance Insurance Edelweiss Edelweiss Edelweiss Asset ECL Finance Nido Ho
Slide 7: Performance highlights – quarter ended Jun 23
Performance highlights – quarter ended Jun 23 1 Healthy profitability and upward trend on operating metrics across businesses Slide 7 - 10 2 Update on key priorities Slide 11-15 Nuvama demerger and share allotment completed; listing on track in Aug 23 Scaling Asset Management and Insurance businesse
Slide 8: Healthy profitability across businesses
1 Healthy profitability across businesses PAT for the quarter in INR Cr Asset Management Asset Reconstruction Credit 80 65 57 37 35 24 Jun 22 Jun 23 Jun 22 Jun 23 Jun 22 Jun 23 138% YoY 23% YoY 6% YoY 7
Slide 9: Earnings distribution across businesses
1 Earnings distribution across businesses INR Cr Quarter Ended Business Jun 23 Jun 22 Business Mar 22 Alternatives Asset Management 46 21 Mutual Fund 11 3 Asset Reconstruction 80 65 NBFC 34 32 Housing Finance 3 3 General Insurance (39) (40) Life Insurance (27) (55) BMU & Corporate (30) 6 EFSL Consol
Slide 10: Update on operating performance
1 Update on operating performance Alternative • Fee-Paying AUM grew 23% YoY to INR 24,600 Cr; deployed ~INR 1,500 Cr in the quarter Asset Management • Launched first of its kind Pre-REIT offering for Indian Investors – Rental Yield Plus • AUM grew 25% YoY to INR 110,000 Cr; AUM market share at 2.43%
Slide 11: Update on operating performance
1 Update on operating performance • Gross direct premium income growth of 31% for the quarter; against industry growth of 18% General Insurance • Inked new partnership with Dvara KGFS; activated partnerships with Maruti and Ola. • AUM recorded a robust growth of 27% YoY Life Insurance • Significant
Slide 12: Update on key priorities
2 Update on key priorities A Demerger and Listing of Nuvama Wealth Management B Scaling Asset Management and Insurance businesses C Reducing Wholesale loan assets 11
Slide 13: Demerger and Listing of Nuvama Wealth Management
A Demerger and Listing of Nuvama Wealth Management Step 1 – Capital Raise Step 2 - Demerger Step 3 - Allotment Step 4 - Listing Phase I Phase II & III Allotment Listing Capital raise in NCLT order received and Allot 30% EFSL holdings Listing of Nuvama Nuvama made effective for Phase II to Shareholde
Slide 14: Asset Management businesses showing robust AUM growth
B Asset Management businesses showing robust AUM growth Alts – Assets Under Management (INR Cr) MF – Assets Under Management (INR Cr) 48,300 1,10,000 88,000 36,250 30,000 62,000 Jun 21 Jun 22 Jun 23 Jun 21 Jun 22 Jun 23 AUM growth of 33% YoY AUM growth of 25% YoY 13
Slide 15: Consistent premium growth in Insurance businesses
B Consistent premium growth in Insurance businesses GI – Gross Premium for the quarter (INR Cr) LI – Gross Premium for the quarter (INR Cr) 151 249 240 117 63 215 Jun 21 Jun 22 Jun 23 Jun 21 Jun 22 Jun 23 Please refer to the Business Updates filed on our General and Life Insurance business for more
Slide 16: Wholesale reduction ahead of plan; reduction of 43% YoY
C Wholesale reduction ahead of plan; reduction of 43% YoY ECLF wholesale loan assets (INR Cr) 5,700 5,700 4,850 3,000 Mar 23 Jun 23 Jun 23 Mar 24 planned actuals planned Expect momentum to continue with planned reduction 15
Slide 17: Customer Reach grows 26% YoY
3 Customer Reach grows 26% YoY Customer Reach (# in lakhs) 59 47 33 Jun 21 Jun 22 Jun 23 16
Slide 18: Well capitalised businesses
4 Well capitalised businesses Businesses Metric Value NBFC Capital Adequacy 39.8% Housing Finance Capital Adequacy 33.7% Asset Reconstruction Capital Adequacy 51.6% Life Insurance Solvency Ratio 216% General Insurance Solvency Ratio 167% 17
Slide 19: Reduced ~INR 2,800 Cr of Debt YoY
4 Reduced ~INR 2,800 Cr of Debt YoY Net Debt (INR Cr) INR Cr Business Jun 23 18,160 NBFC 6,640 15,380 Housing Finance 1,655 Alternatives 260 Asset Reconstruction 2,330 BMU & Corporate 6,595 Gross Debt 17,480 (Less) Liquidity 2,100 Net Debt 15,380 Jun 22 Jun 23 18
Slide 20: Cash flow plan
4 Cash flow plan INR Cr Jul 23 to Jun 24 Opening Available Liquidity 2,100 Expected inflows (less) expected outflows 600 Fresh borrowings 3,500 Disbursements (4,000) Closing Available Liquidity 2,200 19
Slide 21: Assets in each tenor range adequately cover liabilities
4 Assets in each tenor range adequately cover liabilities INR Cr Assets Liabilities Excess / (Gap) Up to 1 year 11,000 9,400 1,600 1-3 years 12,100 9,500 2,600 3 years+ 9,800 8,400 1,400 20
Slide 22: Business Performance: Asset Management
Business Performance Asset Management
Slide 23: Asset Management businesses at a glance
Asset Management Asset Management businesses at a glance Quarter ended Jun 23 Equity AUM Profit After Tax INR 807 Cr INR 158,300 Cr INR 57 Cr Fee Income INR 129 Cr 22
Slide 24: Alternative Asset Mgt: Business performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Business performance snapshot Key Metrics for the quarter Business Update • AUM grew 33% YoY to INR 48,300 Cr Equity (INR Cr) 596 • Raised AUM of INR 2,000 Cr in the quarter • Fee Paying AUM grew 23% YoY to INR 24,600 Cr AUM (INR Cr) 48,300 • Steady annui
Slide 25: Alternative Asset Mgt: Financial performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Financial performance snapshot INR Cr Jun 23 Jun 22 AUM 48,300 36,250 Fee Paying AUM 24,600 20,000 Equity 596 240 Net Revenue 126 67 Opex 71 42 Profit After Tax 46 21 24
Slide 26: Alternative assets overview
Alternative Asset Mgt Alternative assets overview AUM – Strategy wise Fee Paying AUM – Strategy wise AUM – Tenure wise 15% 26% 40% INR 48,300 Cr INR 24,600 Cr INR 48,300 Cr 60% 74% 85% Credit Real Assets Credit Real Assets Asset Over 3 year duration Asset less than 3 year duration 25
Slide 27: Mutual Fund: Business performance snapshot
Mutual Fund Mutual Fund: Business performance snapshot Key Metrics for the quarter Business Update • Equity AUM grew by 35% YoY to INR 25,400 Cr Equity (INR Cr) 212 • Net equity inflows of INR 400 Cr during the quarter • AUM grew by 25% YoY to INR 1,10,000 Cr AUM (INR Cr) 1,10,000 • Market share of
Slide 28: Mutual Fund: Financial performance snapshot
Mutual Fund Mutual Fund: Financial performance snapshot INR Cr Jun 23 Jun 22 AUM 1,10,000 88,000 Net New Money (700) 5,930 Equity 212 186 Net Revenue 52 34 Opex 41 31 Profit After Tax 11 3 27
Slide 29: Consistent growth in AUM and customer base
Mutual Fund Consistent growth in AUM and customer base MF Equity AUM (INR Cr) MF Debt AUM (INR Cr) 25,400 82,600 65,300 18,800 13,500 43,600 Jun 21 Jun 22 Jun 23 Jun 21 Jun 22 Jun 23 SIP Book (INR Cr) Active Folios (# in Lakhs) 159 11.8 130 10.2 93 7.0 Jun 21 Jun 22 Jun 23 Jun 21 Jun 22 Jun 23 Growi
Slide 30: Business Performance: Asset Reconstruction
Business Performance Asset Reconstruction
Slide 31: Asset Reconstruction: Business performance snapshot
ARC Asset Reconstruction: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 2,875 • Recoveries of INR 2,121 Cr for the quarter, of which 12% was from retail portfolio AUM (INR Cr) 39,150 • Deployed INR 440 Cr in the quarter Capital employed • Capital employed
Slide 32: Asset Reconstruction: Financial performance snapshot
ARC Asset Reconstruction: Financial performance snapshot INR Cr Jun 23 Jun 22 AUM 39,150 38,900 Capital Employed 4,744 5,160 Wholesale assets 4,026 4,500 Retail assets 718 660 Equity 2,875 2,541 Gross Revenue 236 230 Opex 24 26 Profit After Tax 80 65 Edelweiss’ share in PAT 48 39 31
Slide 33: Business Performance: Credit
Business Performance Credit
Slide 34: Credit businesses at a glance
Credit Credit businesses at a glance Quarter ended Jun 23 Equity AUM Profit After Tax INR 4,697 Cr INR 11,454 Cr INR 37 Cr 33
Slide 35: NBFC: Business performance snapshot
NBFC NBFC: Business performance snapshot Key Metrics for the quarter Business Update • Maintained credit quality with stable asset quality ratios Equity (INR Cr) 3,899 o GNPA at 2.80% o Total provision cover of 278% AUM (INR Cr) 7,453 • Wholesale book reduced 43% YoY; expect momentum to continue Cap
Slide 36: NBFC: Financial performance snapshot
NBFC NBFC: Financial performance snapshot INR Cr Jun 23 Jun 22 AUM 7,453 11,419 Credit Assets 6,918 10,859 Gross Loan Book 3,525 5,978 Gross Revenue 372 357 Net Revenue 116 82 Opex 70 63 Credit Cost (0) (22) Profit After Tax 34 32 GNPA 2.80% 2.76% NNPA 1.77% 1.93% Total Provision Cover 278% 237% 35
Slide 37: Housing Finance: Business performance snapshot
Housing Finance Housing Finance: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 798 • Portfolio continues to strengthen o GNPA at 1.93%; improved from 2.12% YoY o Collection efficiency for the quarter at 98% AUM (INR Cr) 4,001 • Disbursals ongoing with Stan
Slide 38: Housing Finance: Financial performance snapshot
Housing Finance Housing Finance: Financial performance snapshot INR Cr Jun 23 Jun 22 AUM 4,001 4,343 Credit Assets 3,207 3,398 Gross Loan Book 2,981 3,176 Gross Revenue 110 108 Net Revenue 35 33 Opex 31 26 Credit Cost (1) 2 Profit After Tax 3 3 GNPA 1.93% 2.12% NNPA 1.47% 1.68% Total Provision Cover
Slide 39: Business Performance: Insurance
Business Performance Insurance
Slide 40: Insurance businesses at a glance
Insurance Insurance businesses at a glance Quarter ended Jun 23 Gross Premium Policies Issued Customer Reach INR 400 Cr # 77,600 ~50 lakhs 39
Slide 41: General Insurance: Business performance snapshot
General Insurance General Insurance: Business performance snapshot Key Metrics for the quarter Business Update • Gross direct premium income (GDPI) growth of 31% for Equity (INR Cr) 181 the quarter • Superior growth seen in the retail health segment at 81% YoY in the quarter; against industry averag
Slide 42: General Insurance: Financial performance snapshot
General Insurance General Insurance: Financial performance snapshot INR Cr Jun 23 Jun 22 Net Premium Income 93 68 Investment Income & Other 38 8 Income Total Income 131 76 Policy benefits & insurance policy 64 79 liability Other expenses 91 52 Profit After Tax (39) (40) 41
Slide 43: Life Insurance: Business performance snapshot
Life Insurance Life Insurance: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 682 • AUM recorded a robust growth of 27% YoY Individual APE (INR Cr) 64 • Traditional Par and Non-Par products constitute > 80% of product mix #Policies Issued 8,914 • Launched n
Slide 44: Life Insurance: Financial performance snapshot
Life Insurance Life Insurance: Financial performance snapshot INR Cr Jun 23 Jun 22 Net Premium Income 240 231 Investment Income & Other 326 (106) Income Total Income 566 125 Policy benefits & insurance policy 447 37 liability Other expenses 146 143 Profit After Tax (27) (55) Edelweiss’ share in PAT
Slide 45: Governance & Corporate Responsibility
Governance & Corporate Responsibility
Slide 46: 8 Member Board with 4 Independent Directors
8 Member Board with 4 Independent Directors Mr. Ashok Kini Independent Director • Former Managing Director (National Banking Group) State Bank of India • Served as an advisor to the Thorat Committee on Financial Inclusion at RBI • 35 years of banking experience Dr. Ashima Goyal Independent Director
Slide 47: Significant institutional ownership
Significant institutional ownership Above 1% Shareholding Pattern as on Jun 30, 2023 Key Shareholders Percent 1 Pabrai Investment Funds 9.2% Employee Trust 2 TIAA CREF funds 4.2% DIIs, Non 4.8% Promoter Group Institutions 3 BIH SA 3.9% & Others 32.8% 4 Baron Asset Management 3.8% 28.7% 5 LIC 2.6% 6
Slide 48: Our contribution to building a more sustainable tomorrow
Our contribution to building a more sustainable tomorrow Under the leadership of EdelGive Foundation, we have… Over ~INR 863 Cr mobilized Partnered with over 168 Assisted over 60% of EdelGive’s Ensured long term through commitments high caliber NGOs NGO partners to grow at a CAGR association with av
Slide 49: Our investment in communities
Our investment in communities EdelGive Foundation’s commitment to investing in communities 90 Districts Sustainable Women across 12 States Quality Education Livelihoods Empowerment 20 lakh children impacted 1.83 lakh Individuals trained 2.37 lakh women supported 31,000 schools reached 1,563 watershe
Slide 50: Trusted partner: EdelGive funding partners & networks
Trusted partner: EdelGive funding partners & networks Foundations, Corporates and HNIs partner with Edelgive Platform for their philanthropic allocation 49
Slide 51: Safe Harbour
Safe Harbour DISCLAIMER : This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate companies (“Ed
Slide 52: Safe Harbour
Safe Harbour Slide 4: Net worth includes MI, investment in CCD by CDPQ of INR 656 Cr, Ex-Insurance PAT is post MI Slide 4,18,19: Available Liquidity is calculated as on balance sheet date and includes high quality liquid assets and LAS book; Excludes Nuvama Slide 4,18: Debt includes accrued interest
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