Cholamandalam Financial Holdings Ltd · NSE:CHOLAHLDNG
Cholamandalam Financial — Q2 FY23 Earnings Presentation
74 slides from Cholamandalam Financial's earnings presentation, Nov 8, 2022
Slide 1: Cover letter to stock exchanges: presentation to analysts/investors
November 8, 2022 The Manager The Secretary Listing Department BSE Limited, National Stock Exchange of India Ltd 25th Floor, Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor Dalal Street, Fort, Plot No.C-1, Block G Mumbai 400 001 Bandra-Kurla Complex Bandra (E) Mumbai 400 051 Symbol : CHOLAHLDNG
Slide 2: Corporate Presentation – Q2-FY23
CHOLAMANDALAM FINANCIAL HOLDINGS LIMITED CORPORATE PRESENTATION – Q2-FY23 1
Slide 3: Murugappa Group in a Nutshell
Murugappa Group in a Nutshell Consolidated Group Market 122 Years of $7.0 $27.2 Turnover cap (as on Years Existence B B (FY22) 30th Sep 2022) Listed 3 Sectors 29 Businesses 10 Companies 40 Geographical 105 Manufacturing 53,000+ Work force Countries Presence Locations Locations 2
Slide 4: Murugappa Group Overview
Murugappa Group Overview Murugappa Group Agriculture Engineering Financial services Market Cap(Cr.) 39,738 69,954 72,510 Turnover (Cr.) 23,431 8,432 15,049 PAT(Cr.) 1,788 1,341 2,305 Market Cap(Cr.) 29,132 10,606 17,004 52,950 60,212 NA 12,298 Turnover (Cr.) 19,068 4,363 3,290 15350 10,141 4.824 84
Slide 5: Spirit of Murugappa
SPIRIT OF MURUGAPPA “The fundamental principle of economic activity is that no man you transact with will lose, then you shall not." 4
Slide 6: Cholamandalam Financial Holdings Limited (Core Investment Company)
Cholamandalam Financial Holdings Limited (CFHL) (Core Investment Company) 45.38% 60.00% 49.50% Cholamandalam Cholamandalam MS Investment and Cholamandalam MS General Insurance Risk Services Limited Finance Company Company Limited Limited (CIFCL) (CMSRSL) (CMSGICL) • Subsidiary (as per Ind AS) • Join
Slide 7: Shareholding pattern
Shareholding Shareholding pattern pattern Shareholding Pattern Institutional Holders (More than 1%) as of September 30, 2022 Top Domestic Institutional Holdings * ICICI Mutul Fund 14.44% * Aditya Birla Mutul Fund * HDFC Mutul Fund 11.63% 48.61% * Nippon India Mutual Fund * Sundaram Mutul Fund 25.32%
Slide 8: Performance Highlights - Consolidated
Performance Highlights - Consolidated Rs.in Cr. Revenue Profit after tax EPS (Rs.) Q2 FY23 4,355 606 15.07 7% 7% 21% Q2 FY22 3,594 652 16.14 Rs.in Cr. Revenue Profit after tax EPS (Rs.) H1 FY23 8,318 1,189 29.32 16% 18% 17% H1 FY22 7,197 1,009 25.01
Slide 9: Performance Highlights – Consolidated
Performance Highlights – Consolidated PROFIT AFTER TAX (RS.IN CRS) PROFIT AFTER TAX (RS. IN CRS) Q1Q1 FY22 FY22 Q1 FY21 Q2 FY23 Q2 FY22 H1 FY23 H1 FY22 2 2 611 39 652 939 1,009 68 4 3 1,125 1,189 563 40 606 60 CIFCL CMSGICL OTHERS CFHL CONSOL CIFCL CMSGICL OTHERS CFHL CONSOL 8
Slide 10: Financial Performance & Metrics
Financial Performance & Metrics CFHL - Standalone CIFCL H1 FY23 H1 FY22 Particulars (Rs. in Cr) H1 FY23 H1 FY22 Disbursements (Rs. in Cr) 27,953 12,341 As of As of Income 31 30 30-Sep-2022 31-Mar-2022 Expenses 5 6 AUM (Rs. in Cr) 91,841 82,904 Profit Before Tax 26 24 No.of Branches 1,151 1,145 Tax E
Slide 11: Regulatory Ratios of CFHL
Regulatory Ratios of CFHL Rs Crs As of As of Particulars September 30, March 31, 2022 2022 Owned Funds (A) 1,199.75 1,187.17 Adjusted Networth (B) 13,851.02 12,072.90 Risk Weighed Assets ( C) 1,281.26 1,280.57 Outside Liabilities (D) 105.74 103.73 Net assets (E) 1,280.38 1,279.89 Investment in equit
Slide 12: Cholamandalam Investment and Finance Company Limited
Cholamandalam Investment and Finance Company Limited 11
Slide 13: Disbursements
Disbursements Disbursements (₹Cr) Disbursements (%) * 27,953 6% 2% 1% 5,254 5% 16% 5% 6% 21% 5% 19% 1,354 13% 10% 5% 5% 4,282 5% 15% 15% 15% * 14,623 * 13,329 3,132 * 12,341 2,121 520 * 8,706 743 808 90% 611 80% 2,036 2,246 2,006 78% 316 17,063 64% * 3,635 605 58% 61% 204 1,624 203 8,562 8,502 9,007
Slide 14: Assets Under Management
Assets Under Management Business - Assets under Management (₹Cr) Business - Assets under Management (%) * 87,668 * 81,925 4,765 2,937 6,454 1% 1% 4% 5% 5,938 * 70,023 7% 7% * 67,821 551 7% 8% 502 4,880 18,843 4,407 17,675 21% 22% 22% 21% 14,509 15,306 55,376 57,606 71% 68% 70% 49,285 66% 48,403 Q1 F
Slide 15: Profitability and Net worth
Profitability and Net worth Profit after tax (₹Cr) Networth (₹Cr) 1129 *12,849 *12,316 164 164 933 *10,421 *9,887 164 164 607 566 563 12,152 12,684 9,723 10,256 327 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 H1FY22 H1FY23 Reserves and Surplus Equity Share Capital * Total Networt
Slide 16: Chola – Stage 3 Assets Trend
Chola –Stage 3 Assets Trend Chola 44.27% 43.52% 42.93% 12.00% 41.52% 41.62% 41.48% 40.69% 39.67% 38.80% 40.00% 10.00% 36.45% 35.51% 8.00% 35.00% 6.79% 6.16% 5.85% 6.00% 2.41% 30.00% 2.24% 4.37% 4.16% 3.80% 3.75% 3.96% 2.27% 3.84% 4.00% 3.34% 2.98% 1.73% 1.58% 1.63% 1.75% 1.59% 1.39% 25.00% 1.28% 4.3
Slide 17: Vehicle Finance
Vehicle Finance Primary Colours 16
Slide 18: Vehicle Finance: H1 FY23 Performance
Vehicle Finance: H1 FY23 Performance • Disbursements grew by 89% in H1FY23 to Rs.17,063 crores as Disbursements compared to Rs.9,007 crores in H1FY22. Assets under • AUM have grown by 17% YoY. management Loss and • Loan losses improved to 1.9% in H1FY23 as compared to 2.1% in provisions H1FY22. Prof
Slide 19: Sector outlook – Vehicle Finance business (1/3)
Sector outlook – Vehicle Finance business (1/3) Sector Outlook Chola’s Position ▪ The Light commercial vehicle segment had a ▪ Increased demand for Light commercial vehicle will growth of 46% in Q2 FY’23 & 70% in H1 FY’23. help us garner higher volumes, however we will be This segment is witnessing
Slide 20: Sector outlook – Vehicle Finance business (2/3)
Sector outlook – Vehicle Finance business (2/3) Sector Outlook Chola’s Position ▪ The Passenger vehicle (Car & MUV) segment ▪ Our focus continues to be on retail customers had a growth of 38% in Q2 FY’23 & 39% in H1 especially in smaller towns and rural areas. We will FY’23. This segment is poised f
Slide 21: Sector outlook – Vehicle Finance business (3/3)
Sector outlook – Vehicle Finance business (3/3) Sector Outlook Chola’s Position ▪ The Construction Equipment segment had a ▪ Our exposure in this segment is around 6% at a growth of 8% in Q2 FY’23 & 30% in H1 FY’23. portfolio level and our focus will be on building a The volumes are expected to pick
Slide 22: Auto Industry Outlook
Auto Industry Outlook Trend in Domestic LCV Sales Trend in Domestic SCV Sales (in Units) (in Units) Chola @ 144% 1,56,588 88,630 Chola @ -1% CAGR @ 15% CAGR @ 15% 46% 1,13,596 88,108 51,512 75,254 77,852 43,945 44,065 38,446 Q2 FY'20 Q2 FY'21 Q2 FY'22 Q2 FY'23 Q2 FY'27 (E) Q2 FY'20 Q2 FY'21 Q2 FY'22
Slide 23: Auto Industry Outlook
Auto Industry Outlook Trend in Domestic HCV Sales Trend in Domestic Car & MUV Sales (in Units) (in Units) 1,05,420 Chola @25% Chola @ 79% CAGR @ 20% 11,97,269 38% 53% 10,27,922 64,966 CAGR @ 10% 7,26,938 7,43,410 42,366 6,22,518 33,166 19,127 Q2 FY'20 Q2 FY'21 Q2 FY'22 Q2 FY'23 Q2 FY'27 (E) Q2 FY'20
Slide 24: Vehicle Finance—Business Model & Positioning
Vehicle Finance—Business Model & Positioning CV PV Low Industry Low Low Industry Low Chola Position Chola Position Principal Operator Salaried > 50 Vehicles Large Operators 26- 50 vehicles HCV Self Employed with Returns Returns Financials RISK RISK Medium Operators 10 -25 – HCV & LCV vehicles Taxi a
Slide 25: Vehicle Finance—Business Model & Positioning
Vehicle Finance—Business Model & Positioning Tractor CE Low Industry Low Low Industry Low Chola Position Super Strategic Chola Position Large Farmer Strategic Customer Captive Users / Prior Vehicles Captive Users/Prior Vehicles Returns Returns Medium Retail operator RISK RISK Medium Farmers Small Re
Slide 26: Vehicle Finance - Disbursement/Portfolio Mix – Q2FY23
Vehicle Finance - Disbursement/Portfolio Mix – Q2FY23 Well diversified across geography Disbursements - State wise Portfolio - State wise MP AP MP AP Karnataka Karnataka Maharashtra Maharashtra 6% 6% Kerala Kerala 6% 5% 7% 6% Puducherry 11% Gujarat Puducherry 10% 4% 5% Telangana Gujarat 0% Telangana
Slide 27: Vehicle Finance - Disbursement/Portfolio Mix – Q2FY23
Vehicle Finance - Disbursement/Portfolio Mix – Q2FY23 Well diversified product segments Disbursements (₹Cr) - Product wise Portfolio (₹Cr) - Product wise HCV 3 Wheeler 3 Wheeler CE HCV CE 6% 0.3% 1% 6% 9% 6% LCV 2 Wheeler 2 Wheeler 19% 8% 4% LCV 21% MUV 9% Used Vehicles 27% Used Vehicles MUV 31% 7%
Slide 28: Vehicle Finance - Disbursement Mix – Quarter-wise
Vehicle Finance - Disbursement Mix – Quarter-wise Disbursement (₹Cr) - Product wise Disbursement (%) – Product wise * 8,785 * 8,562 * 8,502 572 502 468 * 7,647 664 556 479 6% 6% 7% 6% 6% 447 5% 4% 8% 6% 6% 333 * 6,161 1,579 1,595 1,604 19% 17% 19% 18% 19% Yield 1,332 Low 397 279 590 780 763 7% 569 8
Slide 29: Vehicle Finance - Portfolio Mix – Quarter-wise
Vehicle Finance - Portfolio Mix – Quarter-wise Portfolio (₹Cr) - Product wise Portfolio (%) – Product wise 57,606 * 55,376 6% 6% 6% 6% 6% * 52,881 3,666 * 50,675 3,557 9% 8% 7% 7% 7% Low Yield * 49,285 4,015 3,395 3,189 4,000 3,083 3,914 3,937 21% 21% 21% 21% 21% 4,313 12,305 11,630 10,995 Medium Yi
Slide 30: Vehicle Finance - Portfolio Mix – Quarter-wise
Vehicle Finance - Portfolio Mix – Quarter-wise Portfolio (₹Cr) - Product wise Portfolio (%) – Product wise 57,606 * 55,376 6% 6% 6% 6% 6% * 52,881 3,666 * 50,675 3,557 9% 8% 7% 7% 7% Low Yield * 49,285 4,015 3,395 3,189 4,000 3,083 3,914 3,937 21% 21% 21% 21% 21% 4,313 12,305 11,630 10,995 Medium Yi
Slide 31: Vehicle Finance - Disbursements and Asset Under Management
Vehicle Finance - Disbursements and Asset Under Management Disbursements (₹Cr) Assets under management (₹Cr) *55,376 *57,606 17,063 547 417 *48,403 *49,285 1,295 1,103 9,007 57,189 8,562 8,502 54,829 47,108 48,182 6,161 2,846 Q1 FY22 Q1FY23 Q2 FY22 Q2FY23 H1FY22 H1FY23 Q1 FY22 Q1 FY23 Q2 FY22 Q2FY23
Slide 32: Vehicle Finance - Income and Profit before tax
Vehicle Finance - Income and Profit before tax Income (₹Cr) Profit before tax (₹Cr) 948 4,146 3,819 849 591 2,133 480 468 2,013 1,916 1,903 258 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 H1FY22 H1FY23 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 H1FY22 H1FY23 31
Slide 33: Loan Against Property
Loan Against Property ary Colours 32
Slide 34: Loan Against Property – H1 FY23 Performance
Loan Against Property – H1 FY23 Performance • Disbursements grew by 117% in H1FY23 at Rs.4,612 crores as Disbursements compared to Rs.2,122 crores in H1FY22. Asset under • AUM have grown by 26% YoY. management Loss and provisions • Loan losses improved to -0.03% in H1FY23 from 1.0% in H1FY22. Profit
Slide 35: Loan Against Property: Industry outlook
Loan Against Property: Industry outlook Sector Outlook Chola’s Position • The sector witnessed improvement in the disbursements • Chola’s LAP business has witnessed strong post pandemic. Disbursements would further pick-up growth in disbursements during H1 in line with because of the festive season
Slide 36: Loan Against Property - Disbursements and Asset Under Management
Loan Against Property - Disbursements and Asset Under Management Disbursements (₹Cr) Assets under Management (₹Cr) * 18,843 4,282 * 17,675 1,318 113% 1,418 * 15,421 * 14,513 1,828 1,961 38% 17,525 2,036 2,006 16,257 1,624 13,592 12,552 2,246 382 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 H1FY22 H1FY23 Q1 FY22
Slide 37: Loan Against Property – Income and Profit before tax
Loan Against Property – Income and Profit before tax Income (₹Cr) Profit before tax (₹Cr) 1,043 872 378 540 503 432 440 200 195 178 130 65 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 H1FY22 H1FY23 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 H1FY22 H1FY23 36
Slide 38: Home Loans
Home Loans Primary Colours 37
Slide 39: Home Loans – H1 FY23 Performance
Home Loans – H1 FY23 Performance • Disbursements grew by 48% in H1FY23 at Rs.1,354 crores as Disbursements compared to Rs.808 crores in H1FY22. Asset under • AUM have grown by 32% YoY. management Loss and provisions • Loan losses improved to 0.4% in H1FY23 from 1.3% in H1FY22. Profit before tax • PB
Slide 40: Home Loans - Industry outlook
Home Loans - Industry outlook Sector Outlook Chola’s Position • Demand remained robust in Q2 FY23 and Affordable • Chola has significantly expanded its geographical HFC growth is expected to be 17-20% in FY23. footprint especially in the North, East & West Zones while continuing to deepen its footpr
Slide 41: Home Loans - Disbursements and Asset Under Management
Home Loans - Disbursements and Asset Under Management Disbursements (₹Cr) Assets under Management (₹Cr) *6,454 *5,938 478 500 *4,880 1,354 *4,407 579 602 5,976 808 5,438 743 611 605 4,301 3,805 203 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 H1FY22 H1FY23 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 On Book Assigned * Total
Slide 42: Home Loans - Income and Profit before tax
Home Loans - Income and Profit before tax Income (₹Cr) Profit before tax (₹Cr) 158 426 320 103% 93 85 222 74 204 154 167 51 42 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 H1FY22 H1FY23 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 H1FY22 H1FY23 41
Slide 43: Funding Profile
Funding Profile <&} Chola aXe 42 Murugappa Financial Holdings
Slide 44: CAR and Credit Rating
CAR and Credit Rating Capital Adequacy Ratio (CAR) – As per RBI guideline Tier I Tier II 20.69 19.62 19.07 19.15 18.40 5.41 3.93 3.13 2.90 2.63 15.28 15.14 16.49 16.25 15.77 FY20 FY21 FY22 Q1FY23 Q2FY23 Minimum CAR Stipulated by RBI is 15% & for Tier I is 10% Credit Rating Loan type India ratings Ca
Slide 45: Diversified Borrowings Profile (I/II)
Diversified Borrowings Profile (I/II) Borrowing mix by instrument type (₹Cr) * 62,309 * 65,806 * 69,174 * 73,929 * 79,321 7% 7% 4% 7% 4% 2% 2% 2% 2% 5% 2% 7% 6% 5% 6% 6% 5% 7% 2% 4% 2% 7% 2% 2% 2% 15% 17% 18% 14% 14% 55% 57% 61% 58% 58% 7% 6% 6% 5% 5% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Tier II Capit
Slide 46: Diversified Borrowings Profile (II/II)
Diversified Borrowings Profile (I/II) Borrowing mix by investor type (₹Cr) * 62,309 * 65,806 * 69,174 * 73,929 * 79,321 6% 5% 5% 6% 7% 4% 2% 3% 3% 3% 2% 2% 2% 2% 5% 3% 1% 4% 6% 7% 66% 66% 66% 63% 69% 1% 1% 1% 1% 1% 5% 4% 4% 5% 4% 11% 11% 9% 11% 9% 2% 3% 3% 4% 3% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Tr
Slide 47: ALM Statement as of 30th Sep 2022 (As per IND AS)
ALM Statement as of 30th Sep 2022 (As per IND AS) (₹Cr) ALM snapshot as on 30th Sep 2022 Particulars 1m >1 to 2m >2 to 3m >3 to 6m >6m to 1 yr >1 to 3 yr >3 to 5 yr >5 yr Total Cash & Bank Balances 2,418.08 - 819.21 100.93 94.74 - - 1,408.35 4,841.31 Advances 2,955.01 2,773.24 2,943.24 8,340.25 14,8
Slide 48: Cholamandalam MS General Insurance Company Limited
Cholamandalam MS General Insurance Company Limited Financial data in this section is as per IGAAP 47
Slide 49: Chola MS General Insurance: Brief Overview
Chola MS General Insurance: Brief Overview Murugappa Group 2764 ◼ Murugappa Group - India's leading business conglomerate H1 FY’23 GWP (INR Cr) ◼ Founded in 1900, Headquartered in Chennai, the INR 547 Billion Murugappa Group is one of India's leading business conglomerates ◼ Diversified presence in
Slide 50: Key Financial Parameters (Rs. Crs)
Key Financial Parameters (Rs. Crs) Particulars – In Rs. Cr FY'20 FY’21 FY'22 Q2 FY'22 Q2 FY'23 H1 FY'22 H1 FY'23 Gross Written Premium 4398 4388 4824 1222 1474 2122 2764 Growth -0.7% -0.20% 9.90% 11.96% 20.64% 8.78% 30.25% NWP 3409 3357 3572 913 1097 1569 2029 NEP 3437 3202 3437 854 980 1692 1901 U/
Slide 51: LOB Wise - Quarterly Growth Trends
LOB Wise - Quarterly Growth Trends Other Particulars Months Fire Comml Motor Health PA Crop Others Total Lines Q1 FY'23 12.8% 28.1% 27.5% 19.6% -5.5% 135.0% 28.1% 22.3% Jul'22 8.4% 31.0% 12.4% 18.2% 154.7% 24.2% 6.5% 19.1% In Q2, Chola MS Aug'22 13.5% 31.4% 12.1% 7.2% -33.6% 5.0% 29.9% 9.0% Industry
Slide 52: Among the Top ranked GI Players supported by strong growth
Among the Top ranked GI Players supported by strong growth H1 FY’23 Solid GWP growth over years (CAGR FY2016 - FY 2022 = 11.9% (With Crop); 13.0% (Without Crop) Rs In Crs Growing Market Share 4429 4398 4388 4824 4103 3133 2122 2764 2452 2313 2851 3602 3992 4379 4386 4824 2764 5.3% 139 282 501 437 19
Slide 53: Key Financial Indicators
Key Financial Indicators GWP (INR Cr) and Growth (%) Return on Net Worth(%) FY’22 Excluding exceptional item RoNW @ 9.13% 30.2% 4824 600 0 35. 0% 500 0 4398 4388 20.6% 30. 0% # 25. 0% 14.9% 400 0 9.9% 8.8% 12.0% 2764 20. 0% 300 0 2122 15. 0% 1474 10. 0% 9.3% * 200 0 -0.7% -0.2% 1222 5.0 % 100 0 0.0
Slide 54: Constantly improving operating metrics
Constantly improving operating metrics H1 2021- H1 2022- Particulars 2018-19 2019-20 2020-21 2021-22 22 23 Number of Customers (Live Customer) No in Lacs 100 141 165 254 220 297 Number of policies issued No in Lacs 29 45 63 99 39 52 Market Presence(Branch + CIE + VO) No’s 559 645 593 638 630 635 PSB
Slide 55: Loss Ratio (%)
Loss Ratio (%) Line of Business FY2020 FY2021 FY'22 Q2 FY'22 Q2 FY'23 H1 FY'22 H1 FY'23 Motor OD 61.9% 57.0% 69.8% 69.4% 70.5%^ 63.1% 73.0% Motor TP 90.7% 79.7% 63.4%* 61.1%* 76.5% 61.4%* 77.0% Motor Total 83.0% 74.3% 65.1% 63.2% 74.9% 61.8% 76.0% Health, Travel & PA 40.8% 77.2% 117.1% 122.7% 71.4%
Slide 56: Investment Book Overview (Rs. Crs)
Investment Book Overview (Rs. Crs) Catogery Sep-20 Sep-21 Sep-22 Sep-20 Sep-21 Sep-22 C Govt Sec 3350 4040 5856 32.5% 34.8% 43.9% S Govt Sec 3881 3320 3094 37.6% 28.6% 23.2% Housing sector 866 1102 1864 8.4% 9.5% 14.0% Infra sector 596 1269 1548 5.8% 10.9% 11.6% Approved - Other Corp Bonds 506 201 3
Slide 57: Dominance in Motor, Diversification Underway
Dominance in Motor, Diversification Underway Motor Market Share (Largest GI Segment) Strategized diversification across Motor eco-system GI Market Share by GWP 83.0% 74.3% 65.1% 61.8% 76.0% 5.3% 10.1% 16.4% 23.1% 22.0% 21.0% 5.0% 22.1% 4.9% 25.4% 29.4% 29.3% 35.2% 4.7% 4.6% 67.9% 58.2% 47.6% 48.6% 4
Slide 58: Dominance in Motor, Gaining Prominence in Other Segment
Dominance in Motor, Gaining Prominence in Other Segment 0.4% 0.0% 0.0% 0.0% 0.0% 7.7% 6.3% 6.7% 6.4% 6.9% 10.9% 13.0% 13.4% 15.2% 16.4% 7.2% 9.4% 9.0% 9.5% 10.2% 73.8% 71.2% 70.9% 69.0% 66.5% FY'20 FY'21 FY'22 H1 FY'22 H1 FY'23 Motor Health Commercial PA & Others Crop ▪ Focus on Commercial business
Slide 59: Retail Focused Diversified Operations
Retail Focused Diversified Operations Retail dominated business mix Granular book aided by increasing dispersed customer base Customers (#) in Lacs Commercial 297 11.5% 254 165 141 100 100 Retail 57 67 88.5% FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22 H1 FY'23 Significant growth in retail oriented pol
Slide 60: Multi-channel model ensures lesser concentration & diversified revenue stream
Multi-channel model ensures lesser concentration & diversified revenue Stream Channel wise Mix% 0.0% 0.0% 0.1% 0.2% 0.0% 0.3% 0.4% 0.5% 0.5% 0.3% 3.7% 6.7% 4.7% 4.6% 5.7% 4.4% 5.2% 5.1% 5.6% 6.7% 21.2% 20.8% 18.9% 32.6% 27.5% 25.0% 32.5% 31.7% 38.3% 20.9% 34.1% 35.9% 34.9% 34.5% 30.9% FY'20 FY'21 FY
Slide 61: Volume Growth despite Stress in Financier Partners
Volume Growth despite Stress in Financier Partners GWP Mix% 15.8% 8.1% 11.5% 12.3% 16.0% 18.1% 17.3% 28.6% 30.5% 20.5% 22.8% 31.9% 30.4% 26.4% 15.7% 14.9% 17.2% 19.2% 23.2% 21.7% 25.7% 45.7% 46.5% 46.1% 38.8% 32.6% 31.9% 30.6% FY'18 FY'19 FY'20 FY'21 FY'22 H1 FY'22 H1 FY'23 Financers OEM Agency Othe
Slide 62: Balanced Revenue Mix: Stable in-house + Growth Channels
Balanced Revenue Mix: Stable in-house + Growth Channels Captive Channel Long Lasting Channel Other Tied Channels (CIE + Chola Finance + Coromandel) (IBL + Toyota) (PSU Banca, NBFC, OEM) 30.9% of 13.7% of H1 FY’23 GWP 33.5% of H1 FY’23 GWP H1 FY’23 GWP GWP Rs In Crs GWP Rs In Crs GWP Rs In Crs CAGR =
Slide 63: Tech Enablers across the value chain
Tech Enablers across the value chain Channels Platforms Service Improvement (Products & Services) (Scale, User Experience) (Productivity, Ease of use) ▪ ~94% of monthly policy issuance is ▪ Introduced Phoenix as new ▪ RPA bots enabling 25+ processes in through system integrated channels microservice
Slide 64: Glimpse of new Tech & Digital Capabilities across the value chain (1/2)
Glimpse of new Tech & Digital Capabilities across the value chain (1/2) Distribution Build Sales Fulfilment Underwriting SME Tailor UW OCR Commercial End to End Digital Health Rules Health Pre Policy Policy Issuance Assets Onboarding of agents Health Policy Engine (UW & Medical Digitization API Frau
Slide 65: Glimpse of new Tech & Digital Capabilities across the value chain (2/2)
Glimpse of new Tech & Digital Capabilities across the value chain (2/2) Claims Renewals Operations & Servicing Provider Portal NRLMS AI based proctoring Health Claim Workflow RPA for Claims, Assets Renewal Lead Finance, Operations for new hires AI based Motor Claim Adjudication Management & Lead Pro
Slide 66: Indian General Insurance: Large addressable market
Indian General Insurance: - Large addressable market Significantly underpenetrated Premium as a % GDP Non-Life Insurance Density (Premium per capital) (CY21) (US$) (CY21) (US$) 9.10 2520 5.20 1764 1039 855 2.20 2.20 2.20 1.90 1.70 1.00 0.90 0.50 229 154 130 111 22 22 China Indonesia UK Brazil USA Ja
Slide 67: Industry has Witnessed Strong Growth Over the last 15 Years
Industry has Witnessed Strong Growth Over the last 15 Years General Insurance Gross Premium has grown >10x over the last 15 years (Rs In Cr) Growth of 15.3% CAGR (Last 15 Years) = 15% over H1 FY22 220772 189302 198724 170036 150572 128213 125196 77541 84686 96394 47355 58357 69086 38400 16000 18100
Slide 68: Motor & Retail Health are the Largest GI Segment
Motor & Retail Health are the Largest GI Segment and Continue to Grow at Steady Pace Motor accounts for 39.6% share of the overall GWP Motor Claim ratio for Private General Insurers (single largest segment) (Private Motor Insurance– GWP Rs in Crs (Private Motor Insurance– Claims Ratio) CAGR: 14% 83%
Slide 69: Industry Growth – H1 FY’23
Industry Growth – H1 FY’23 Addressable Market Share Preferred lines - Chola MS INSURER(Rs. in Cr) Growth over Industry Ex -Crop Growth over GWP Rs in Cr Crop Group Health Govt Health H1 FY'22 ,Group & Govt Health H1 FY'22 ICICI-Lombard 10555 22.6% 799 1963 0 7793 17.1% HDFC ERGO 8002 22.6% 1721 702
Slide 70: Industry Landscape – GWP Growth for Private GI Players (5 Yr CAGR)
Industry Landscape – GWP Growth for Private GI Players (5 Yr CAGR) Last 5 H1 FY'23 Growth Market years Motor Mix Heath + Insurers GWP (Rs in over H1 Crop Mix% Fire Mix% Others Share GWP % PA Mix% Crs) FY'22 CAGR ICICI-Lombard 10555 22.6% 10.1% 17.3% 35.1% 25.6% 7.6% 16.5% 15.2% Bajaj Allianz 7831 4.
Slide 71: Favorable Regulations Aiding Growth
Favorable Regulations Aiding Growth Amendment to Acts expected to improve profitability and growth across segments Working well Requiring Tweaks Impending Mandatory Long term Third Party Insurance Crop Insurance Single Limit for Expense of Management 3 years for Cars, 5 years for 2W PMFBY financ
Slide 72: Contact us
Contact us Cholamandalam Financial Holdings Limited (CFHL), Dare House, No. 234, NSC Bose Road, Parrys, Our registered Chennai 600001. office Land Line: 044–40907638 http://www.cholafhl.com Email-ID Krithika E - Company Secretary–krithikae@cfhl.murugappa.com 71
Slide 73: Disclaimer
Disclaimer • Certain statements included in this presentation may be forward looking statements made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Cholamandalam Financial Holdings Ltd and its subsidiaries. There can be no assur
Slide 74: Thank You
Thank You <> Chola 2% Financial Holdings murugappa
Cholamandalam Financial Holdings — Q2 FY23 Earnings Presentation on 6ix