Cholamandalam Investment And Finance Co. Ltd. · NSE:CHOLAFIN
Cholamandalam Investment And Finance — Investor Presentation (June 2019)
67 slides from Cholamandalam Investment And Finance's investor presentation, June 2019
Slide 1: Corporate Presentation - June 2019
Cholamandalam Investment and Finance Company Limited Corporate Presentation - June 2019
Slide 2: Table of Contents
Table of Contents 1. Group overview 2. Corporate 3. Financial 4. Business overview performance segments' overview 5. Funding profile 6. Subsidiaries 7. Risk performance management 2
Slide 3: Murugappa Group Overview
Murugappa Group Overview 3
Slide 4: Murugappa Group in a Nutshell
Murugappa Group in a Nutshell 119 Years of $5.35 Consolidate $10 Group Market Years Existence B Turnover B cap (as on 31st (FY19) Mar 2019) Listed 3 Sectors 28 Businesses 9 Companies 18 Geographical 90+ Manufacturing 50,000+ Work force Countries Presence Locations Locations 4
Slide 5: Murugappa Group Overview
Murugappa Group Overview Murugappa Group Agriculture Engineering Financial services Sector Performance—FY18-19 Market Cap(Cr.) 17,913 16,574 31,601 Turnover (Cr.) 16,442 8,165 11,654 PAT(Cr.) 799 487 1,446 Major Companies Market Cap(Cr.) 12,170 3,236 6,762 7,811 22,356 NA Turnover (Cr.) 13,159 3,283
Slide 6: Corporate Overview
Corporate Overview 6
Slide 7: 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." 7
Slide 8: Cholamandalam Investment & Finance Company Limited
Cholamandalam Investment & Finance Company Limited 9.5 lakh + customers 26,600 + employees Helping customers enter better life Strong employees force to serve more customers 2 lakh customers in year 2000 to 9.5 lakh plus customers till date 200 plus employees in year 2000 to 26,600 employees today R
Slide 9: Our journey so far
Our journey so far Consistently profit making and dividend paying1 company since 1979 with a strong track record and dividends to shareholders FY 1979-90 FY 2000-05 FY 2011 FY 2013 FY 2015 FY 2017 FY 2019 • Commenced • Started Chola • Obtained • Total AUM • Infused capital • Total AUM • Total AUM eq
Slide 10: Shareholding and Share Price Growth
Shareholding Shareholding Pattern Share Price Growth Corporate Bodies, 4% Mutual Funds, 17% 40 30 20 BFSI Index 10 Sensex 0 Public, 7% Chola -10 -20 -30 Mar-19 Jun-18 Jun-19 Sep-18 Dec-18 Promoters, 53% FII, 19% Promoters share holding of 52.94% includes Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Cholam
Slide 11: Business Profile and AUM as on 30th Jun 2019
Business Profile and AUM as on 30th Jun 2019 Business AUM Rs. 57,494Cr Vehicle Finance Rs. Home Equity Others 42,977Cr Rs. 12,119Cr Rs. 2,398Cr 75% 21% 4% SME, 7% Older Tractor, 7% CE, 5% Others 8% Vehicles, TW, 3% 13% Commercial 11% HCV, 16% Refinance, 12% SORP* 80% 3Whlr and LCV, 22% SCV, 6% Home
Slide 12: Strong Geographical Presence
Strong Geographical Presence Jammu & Kashmir (3) Branch Network 995 883 885 891 907 Punjab (21) Himachal Pradesh (13) 161 142 142 110 103 Chandigarh (1) 226 Uttarakhand (15) 254 254 267 259 Harayana (31) 263 273 Delhi (5) 245 247 265 192 192 201 224 257 Assam (24) Rajasthan (77) UP (67) 50 50 48 58
Slide 13: Financial Performance
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Slide 14: Financial Snapshot — 10 Years
Financial Snapshot —10 Years ₹ Cr * Capital Infusion 14
Slide 15: Chola: Financial Summary (I)
Chola: Financial Summary (I) Disbursements (₹Cr) Disbursements (%) 21% 6% 6% 6% 6% *30,451 1,808 13% 13% 13% 13% *25,114 3,837 1,399 3,174 82% 81% 81% 81% 24,807 8,572 7,014 20,540 531 411 939 1,101 5,665 6,940 FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 VF HE Others * Total Disbursements VF HE
Slide 16: Chola: Financial Summary (II)
Chola: Financial Summary (II) Business - Assets under Management (₹Cr) Business - Assets under Management (%) 26% *57,494 *54,279 26% 2,398 3% 4% 4% 4% 2,065 12,119 11,626 * 45,618 24% 21% 23% 21% *42,924 1,761 1,389 10,364 10,095 73% 75% 73% 75% 40,588 42,977 31,440 33,494 FY18 FY19 Q1FY19 Q1FY20 F
Slide 17: Chola: Financial Summary (III)
Chola: Financial Summary (III) Profit after tax (₹Cr) Networth (₹Cr) *6,486 *6,176 156 1186 156 *5,410 *5,098 156 156 918 6019 6330 10% 5254 4942 285 314 FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 Reserves and Surplus Equity Share Capital * Total Networth 17
Slide 18: Chola: Financial Summary (IV)
Chola: Financial Summary (IV) Net Income Margin (%) Expenses Ratio (%) 7.5% 7.3% 6.9% 6.7% 3.0% 2.6% 2.5% 2.5% FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 18
Slide 19: Chola: Financial Summary (V)
Chola: Financial Summary (V) Loan Losses & Provisions (%) ROTA PBT (%) 4.0% 3.7% 3.7% 0.8% 0.8% 0.8% 3.4% 0.6% FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 19
Slide 20: Chola: Financial Summary (VI)
Chola: Financial Summary (VI) Return on equity (%) Earnings per share (₹) 16.2 21.8% 1,849 14.6 19.6% 20.0% 18.0% 16.7% 11.8 9.2 7.5 FY16 FY17 FY18 FY19 Q1FY20 FY16 FY17 FY18 FY19 Q1FY20 20
Slide 21: Chola: Financial Summary (VII)
Chola: Financial Summary (VII) P/E Ratio P/BV Ratio 4.4 24.7 1,849 3.7 21.0 3.5 3.5 3.4 19.8 19.0 17.7 FY16 FY17 FY18 FY19 Q1FY20 FY16 FY17 FY18 FY19 Q1FY20 Note: Ratios have come down due to fluctuation in market price 21
Slide 22: Profit and Loss Statement (As per IND AS)
Profit and Loss Statement (As per IND AS) ₹ Cr Growth % Particulars Q1FY19 Q1FY20 FY19 Q1-o-Q1 Disbursements 7,014 8,572 22% 30,451 Closing Assets (Managed) 46,709 62,837 35% 57,560 Closing Assets (Balance Sheet) 45,666 60,610 33% 55,889 Operating Income 1,606 2,029 26% 6,993 Finance Charges 795 1,0
Slide 23: Balance Sheet (As per IND AS)
Balance Sheet (As per IND AS) Particulars Jun-18 Mar-19 Jun-19 ₹ Cr ASSETS Financial Assets 46,257 56,627 61,472 Cash and Bank balance 1,590 3,675 5,846 Derivative financial instruments 96 89 47 Receivables 54 43 55 Loans 44,330 52,622 55,284 Investments 73 73 73 Other Financial Assets 114 124 167 N
Slide 24: Provision analysis: IND AS vs IGAAP
Provision analysis: IND AS vs IGAAP ₹ Cr Particulars Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 As per IGAAP GNPA 1,325 1,448 1,428 1,450 1,245 1,517 NNPA 740 812 792 790 626 808 Provision 585 636 636 659 620 710 GNPA% 3.0% 3.1% 3.0% 2.8% 2.3% 2.6% NNPA% 1.7% 1.8% 1.6% 1.5% 1.1% 1.4% Provision Covera
Slide 25: Business Overview
Business Overview 25
Slide 26: Vehicle Finance
Vehicle Finance 26
Slide 27: Vehicle Finance: Q1 FY20 Performance
Vehicle Finance: Q1 FY20 Performance Disbursements • Disbursements has grown 22% in Q1FY20 as compared to Q1FY19 Assets under management Assets have grown by 28% as compared to Q1FY19 Loss and Loan losses is at 1.0% as compared to 0.9% in Q1FY19. provisions Profit before tax • PBT for Q1FY20 has
Slide 28: Auto Industry Outlook
Auto Industry Outlook Trend in Domestic LCV Sales Trend in Domestic SCV Sales (in Units) (in Units) CAGR @ 5% CAGR @ 5% 66,464 1,68,858 61,159 1,52,520 54,680 1,38,920 41,001 43,556 80,131 79,714 Jun-16 Jun-17 Jun-18 Jun-19 Jun-24 (E) Jun-16 Jun-17 Jun-18 Jun-19 Jun-24 (E) • Stronger demand from Con
Slide 29: Auto Industry Outlook
Auto Industry Outlook Trend in Domestic HCV Sales Trend in Domestic Car & MUV Sales (in Units) (in Units) CAGR @ 5% CAGR @ 5% 67,717 8,22,330 8,21,021 63,039 6,89,251 7,21,195 53,777 51,862 6,75,456 35,030 Jun-16 Jun-17 Jun-18 Jun-19 Jun-24 (E) Jun-16 Jun-17 Jun-18 Jun-19 Jun-24 (E) • Improved indus
Slide 30: 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 31: 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 32: Vehicle Finance - Disbursement/Portfolio Mix – Q1FY20
Vehicle Finance - Disbursement/Portfolio Mix – Q1FY20 Well diversified across geography & product segments Disbursements - State wise Portfolio - State wise MP AP MP AP Karnataka Karnataka Maharashtra Maharashtra Kerala Kerala 6% 5% 5% 5% 5% Pondicherry 5% Pondicherry 10% 4% Telangana 11% Gujarat 4%
Slide 33: Vehicle Finance - Disbursement/Portfolio Mix – Q1FY20
Vehicle Finance - Disbursement/Portfolio Mix – Q1FY20 Well diversified across geography & product segments Disbursements - Product wise Portfolio - Product wise CE, 5% Tractor, 7% CE, 5% Tractor, 7% TW, 5% TW, 3% Older Vehicles, Older Vehicles, HCV, 9% 13% 15% HCV, 16% Refinance, 12% Refinance, LCV,
Slide 34: Vehicle Finance: Financial summary Q1FY20 (I)
Vehicle Finance: Financial summary Q1FY20 (I) Disbursements (₹Cr) Assets under management (₹Cr) 24,807 42,977 40,588 28% 20,540 42,977 40,588 33,494 31,440 33,494 31,440 6,940 5,665 FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 On Book * Total AUM Note: Under IND AS, Securitisation is treated as O
Slide 35: Vehicle Finance: Financial summary Q1FY20 (II)
Vehicle Finance: Financial summary Q1FY20 (II) Income (₹Cr) Profit before tax (₹Cr) 28% 1,278 5,424 996 4,190 28% 15% 1,561 319 1,223 277 FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 35
Slide 36: Vehicle Finance: Financial summary Q1FY20 (III)
Vehicle Finance: Financial summary Q1FY20 (III) Net Income Margin (%) Expense Ratio (%) 8.1% 3.6% 7.3% 7.2% 6.9% 3.0% 2.9% 2.8% FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 36
Slide 37: Vehicle Finance: Financial summary Q1FY20 (IV)
Vehicle Finance: Financial summary Q1FY20 (IV) Loan Losses & Provisions (%) ROTA PBT (%) 3.7% 3.6% 3.4% 1.0% 0.9% 3.1% 0.8% 0.8% FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 37
Slide 38: Profit and Loss Statement: Vehicle Finance (As per IND AS)
Profit and Loss Statement: Vehicle Finance (As per IND AS) ₹ Cr Growth % Particulars Q1FY19 Q1FY20 FY19 Q1-o-Q1 Disbursements 5,665 6,940 22% 24,807 Closing Assets (Managed) 33,494 42,977 28% 40,588 Operating Income 1,223 1,561 28% 5,424 Finance Charges 640 842 32% 2,803 Net Income 584 718 23% 2,621
Slide 39: Home Equity
Home Equity 39
Slide 40: Home Equity— Q1FY20 Performance
Home Equity— Q1FY20 Performance Disbursements • Disbursements has grown 17% in Q1FY20 as compared to Q1FY19 Asset under • The business has grown the Assets by 16% in Q1FY20. management Loss and provisions • Loan losses reduced to 0.1% from 0.5% as compared to Q1FY19 Profit before tax • PBT for Q1FY2
Slide 41: Home Equity: Industry outlook
Home Equity: Industry outlook • ICRA expects the NBFC credit growth to remain moderate till H1FY20 and revive only in H2FY20. • As market liquidity remains tight, the self-employed segment could face longer working capital cycles and increased borrowing costs. Thus, delays in fresh financing/refinan
Slide 42: Home Equity—Financial Summary Q1FY20 (I)
Home Equity—Financial Summary Q1FY20 (I) Disbursements (₹Cr) Assets under Management (₹Cr) 21% 17% 15% 12,119 3,837 11,626 10,095 10,364 1,991 1,671 3,174 1,043 671 9,954 10,129 17% 9,424 9,321 1,101 939 FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 On Book Assigned * Total AUM Note: Without assig
Slide 43: Home Equity—Financial Summary Q1FY20 (II)
Home Equity—Financial Summary Q1FY20 (II) Income (₹Cr) Profit before tax (₹Cr) 5% 1,247 38% 1,184 305 221 21% 48% 354 292 84 57 FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 Note: Without assignment gains 43
Slide 44: Home Equity—Financial Summary Q1FY20 (III)
Home Equity—Financial Summary Q1FY20 (III) Net Income Margin (%) Expenses Ratio (%) 4.1% 3.9% 3.8% 3.8% 1.1% 1.0% 1.0% 1.0% FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 Note: Ratios are based on average AUM (Without assignment gains) 44
Slide 45: Home Equity—Financial Summary Q1FY20 (IV)
Home Equity—Financial Summary Q1FY20 (IV) Loan Losses & Provisions (%) ROTA PBT (%) 2.8% 2.8% 2.3% 2.2% 0.8% 0.5% 0.1% 0.0% FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 Note: Ratios are based on average AUM (Without assignment gains) 45
Slide 46: Profit and Loss Statement: Home Equity (On Book) (As per IND AS)
Profit and Loss Statement: Home Equity (On Book) (As per IND AS) ₹ Cr Growth % Particulars Q1FY19 Q1FY20 FY19 Q1-o-Q1 Disbursements 939 1,101 17% 3,837 Closing Assets (Balance Sheet) 9,331 10,129 9% 9,954 Operating Income 310 318 3% 1,190 Finance Charges 168 193 15% 707 Net Income 142 125 -12% 483 E
Slide 47: Funding Profile
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Slide 48: CAR, Credit Rating
CAR, Credit Rating Capital Adequacy Ratio (CAR) – As per RBI guideline Tier I Tier II 18.64 18.36 18.15 17.36 17.16 5.03 5.12 4.92 4.74 4.30 13.61 13.24 12.44 13.41 12.86 2016–2017 2017–2018 2018–2019 Q1FY19 Q1FY20 Minimum CAR Stipulated by RBI is 15% & for Tier I is 10% Credit Rating Loan type Indi
Slide 49: Diversified Borrowings Profile (I/II)
Diversified Borrowings Profile (I/II) (₹Cr) Borrowing mix by instrument type * 40,980 * 47,061 * 47,234 * 50,567 * 55,122 12% 12% 12% 11% 10% 30% 34% 35% 44% 43% 7% 5% 4% 1% 4% 11% 10% 10% 4% 4% 4% 5% 6% 7% 10% 4% 5% 27% 26% 25% 21% 17% 9% 8% 8% 8% 7% Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Tier II Capit
Slide 50: Diversified Borrowings Profile (II/II)
Diversified Borrowings Profile (II/II) (₹Cr) Borrowing mix by investor type * 40,980 * 47,061 * 47,234 * 50,567 * 55,122 12% 12% 12% 11% 10% 3% 3% 3% 3% 3% 3% 3% 5% 5% 4% 5% 1% 53% 53% 50% 57% 58% 1% 1% 1% 7% 7% 1% 1% 7% 6% 5% 19% 17% 19% 13% 15% 3% 2% 3% 3% 2% Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Tru
Slide 51: ALM Statement as of 30th June 2019 (As per IGAAP)
ALM Statement as of 30th June 2019 (As per IGAAP) (₹Cr) 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 3,366.96 1,726.00 251.00 - - - - - 5,343.96 Advances 2,199.32 1,134.68 1,211.89 5,106.98 8,843.76 22,818.57 5,069.54 4,317.54 50,702.27
Slide 52: Subsidiaries
Subsidiaries 52
Slide 53: Cholamandalam Home Finance Ltd (As per IND AS)
CHOLAMANDALAM HOME FINANCE LTD (As per IND AS) Income (₹Cr) Profit after tax (₹Cr) -278% 4.3 91% 0.4 337% (4.5) 41.2 (7.6) 13% 10.7 9.48 10.75 FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 53
Slide 54: Cholamandalam Securities Ltd (As per IND AS)
CHOLAMANDALAM SECURITIES LTD (As per IND AS) Income (₹Cr) Profit after tax (₹Cr) 12% 22.0 19.7 5.1 -59% -6% -71% 2.1 5.9 5.5 1.6 0.5 FY18 FY19 Q1FY19 Q1FY20 FY18 FY19 Q1FY19 Q1FY20 54
Slide 55: Risk Management
Risk Management 55
Slide 56: Risk Governance Structure
Risk Governance Structure Oversee the entire risk Board of Directors management process Formed in Oct 2007,operational Risk Management from 2008 Committee Meet four times in a year Reviews framework & process, periodic monitoring of exposures Review of other initiatives with a Chief Risk O
Slide 57: ERM as value centre
ERM as value centre • ERM at Chola works as a value centre • Risk management team engages in defining framework, overseeing enterprise wide risks and building a portfolio for risk appetite based decision making. • At Chola risk management is an integral part of the existing business process and mana
Slide 58: ERM Framework
ERM Framework Measurement & Monitoring 04 01 Review mechanism to using KRI monitor & control risks Evaluate Probability & Impact Understanding & of each event Identification of various risks 03 02 HIGHLIGHTS OF THE RISK MANAGEMENT FRAMEWORK Chola Composite Risk Index, computed using multiple KRIs, h
Slide 59: ERM Framework
ERM Framework Identification, Prioritization and Monitoring of Risk and Process Indicators Identification and Measurement of Risk Assessment of Risk parameters. to Track Operational Risk Level Events & parameters Stage 1 Stage 2 Stage 3 QUALITATIVE RISK MONITORING QUANTITATIVE ASSESSMENT VALIDATION
Slide 60: Risk Monitoring: Risk Index Scoring Methodology
Risk Monitoring : Risk Index Scoring Methodology Scoring method Spread of Weightages m o q r s t Identified Top 20 risks are a combination of n 2.25 p 2.25 2.5 2.25 1.5 a credit, market and operational risks. 4 1 2 21 l 25% weight is given for operational risks – k 2 similar to the weight prescr
Slide 61: ECL Methodology
Chola Enter a better life ECL Methodology 61 Murugappa
Slide 62: Measurement Framework
Measurement Framework Asset ECL classification PD12m Stage 1 LGD EAD Staging Lifetime ECL Retail Stage 2 Framework Basis Account Conduct it is classified into different stages PD : Probability of default PD(100 %) LGD : Loss given default Stage 3 LGD EAD : Exposure at time of default EAD Dis
Slide 63: Measurement Framework
Measurement Framework Asset ECL Description classification PD12m • Assets with low risk (0-30 DPD) on reporting date Stage 1 LGD • Loss estimate based on a 1 year forward estimate EAD Lifetime • Assets with Significant Increase in Credit Risk (SICR) since initial recognition Stage 2 • Assets wit
Slide 64: Retail Pooling
Retail Pooling Chola Portfolios are segmented based on the below categories. PD term structure and LGDs are computed for each segment separately. Home Vehicle Finance Home Equity Others Loan MLCV/2W/3 HE Tamil HCV New LCV New HE Delhi W New Nadu HE Punjab / CAR/MUV USED SHUBH Haryana / HE Gujarat Ne
Slide 65: Contact us
Contact us Cholamandalam Investment and Finance Company Limited (Chola), Dare House 1st Floor, No. 2, NSC Bose Road, Parrys, Our registered Chennai 600001. office Toll free number: 1800-200-4565 (9 AM to 7 PM) Land Line: 044–3000 7172 http://www.cholamandalam.com Sujatha P-Sr. Vice President & Compa
Slide 66: 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 Investment and Finance Company Ltd and its subsidiaries. There can
Slide 67: Thank You
Bi we a aoe! EL Chola CZEATING Thank Yous . murugappa
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