Muthoot Finance Ltd · NSE:MUTHOOTFIN
Muthoot Finance — Q4 FY2017 Earnings Presentation
53 slides from Muthoot Finance's earnings presentation, March 2017
Slide 1: Financial Results Q4 FY 2017
Financial Results Q4 FY 2017 March 2017 MUTHOOT FINANCE LIMITED
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT This presentation may include statements, which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position,
Slide 3: Muthoot Finance: Driving Inclusive Growth
MUTHOOT FINANCE: DRIVING INCLUSIVE GROWTH o India’s largest gold financing company (by loan portfolio) o Trusted pan-India brand in the gold loans sector; revolutionised India’s gold banking o Our intervention has empowered millions of people across the social pyramid Multiple service offerings CORE
Slide 4: MFIN - A Glimpse
MFIN - A GLIMPSE 29 149 tonnes States/Union territory presence Gold jewellery kept as security 4,300+ 325,000+ Pan-India branches Retail investor base across debenture and subordinated debt portfolio 24,000+ 130,000+ Team members Customers served every day ` 272,785 mn Retail Loan Assets Under Manag
Slide 5: Shareholding Pattern
SHAREHOLDING PATTERN Strong promoter interest in business with 74% stake 23.61 2.51 NSE Ticker MUTHOOTFIN (%) Shareholding as on March 31, 2017 BSE Ticker Promoters & Relatives 533398 FII, FC, MF & Others Public Market Capitalisation (as on March 31, 2017) ` 147,387 million 73.88 4
Slide 6: Dividend Payout
DIVIDEND PAYOUT Delivering consistent returns to stakeholders (%) FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 Dividend (% )* 60 60 60 45 60 First Interim Dividend (%) 60 40 40 30 - - Second Interim Dividend (%) - 20 20 - Final Dividend (%) - - 20 10 45 Dividend Payout Ratio (%) 20.30 29.50 35.36 28.59 1
Slide 7: Geographical Presence
GEOGRAPHICAL PRESENCE A strong presence of 4307 branches across India (%) Branches region wise State wise Branch Network Jammu &Kashmir 15 6 Himachal Pradesh 5 Chandigarh Punjab 8 174 62 East West Uttarakhand 21 Haryana Delhi 15 126 225 North South Rajasthan Uttar Pradesh Assam 132 18 152 Bihar 17 (
Slide 8: Digital Initiatives
DIGITAL INITIATIVES Digital convenience for new gen & Millennium Customer acquisition Aadhaar based Electronic KYC Direct Credit Facility • Biometric KYC verification - Convenience • Loan proceeds credited to bank • No further KYC documents –Paperless account • Aadhar • NEFT/RTGS/IMPS mode of bank •
Slide 9: Digital Initiatives
DIGITAL INITIATIVES Online Gold Loan (OGL) • 10% of our active Gold loan Customers are transacting Online Muthoot Online iMuthoot App Mobile App • Fully digital channel to facilitate customers in • New Mobile Application for Android & iOS repayment of Loan and Interest from anywhere on • Multiple la
Slide 10: Shareholder's Funds
SHAREHOLDER’S FUNDS Strong Capital Base Networth Mar-17 Dec-16 Sep-16 Jun-16 Mar-16 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Share Capital 3,995 3,995 3,991 3,991 3,990 0 0 Reserves & Surplus 61,169 60,830 57,901 54,924 52,202 17 1 Tota
Slide 11: Assets
ASSETS Core focus continues to be gold loan Gross retail loan assets under management Mar-17 Dec-16 Sep-16 Jun-16 Mar-16 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Gross retail loan assets 272,785 269,625 274,564 258,606 243,789 12 1 unde
Slide 12: Liabilities
LIABILITIES Stable sources of funding Mar-17 Dec-16 Sep-16 Jun-16 Mar-16 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Secured Non-Convertible Debentures (Muthoot Gold 25,190 29,738 32,692 36,355 40,909 (38) (15) Bonds) Secured Non-Convertib
Slide 13: Revenue & Profit
REVENUE & PROFIT Profit & Loss Statement (` in million) YoY FY 2017 FY 2016 Growth Q4 FY 2017 Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 (%) INCOME Interest Income 56,553 48,130 18 16,995 13,280 13,526 12,752 Other Income 914 620 47 137 184 336 256 Total 57,467 48,750 18 17,132 13,464 13,862 13,008 EXPENDITUR
Slide 14: Gold Loan Portfolio
GOLD LOAN PORTFOLIO Gaining scale over the years Gold Loan Assets Under Management (` in billion) 300 260 274 272 258 269 270 244 243 240 233 216 210 180 157 150 120 90 73 60 33 30 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 13
Slide 15: Gold Holding
GOLD HOLDING Carrying the trust of millions of our customers Gold jewellery kept as security (In tonnes) 160 150 149 146 147 142 137 134 140 131 118 120 112 100 80 66 60 39 40 20 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 14
Slide 16: Geographical Spread of Gold Loan Portfolio
GEOGRAPHICAL SPREAD OF GOLD LOAN PORTFOLIO Diversified gold loan portfolio across India (%) 100 80 60 40 20 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 East 1 2 3 4 5 6 6 7 7 7 7 7 West 5 8 8 10 11 13 15 17 18 18 18 18 North 14 15 15 17 19 22 22 22 22 23 23
Slide 17: Productivity
PRODUCTIVITY Widening presence with increasing gold loan business per branch Average Gold Loan Per Branch (` in million) 75 66.39 63.69 63.32 62.45 63.20 65 60.14 57.55 56.93 55.01 55 45.74 50.63 45 33.50 35 25 15 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 16
Slide 18: Yield on Retail Loan and NIM
YIELD ON RETAIL LOAN AND NIM Yearly (%) Quarterly (%) 26.00 26.00 25.07 24.00 24.00 21.67 22.34 21.43 22.00 22.00 20.27 19.72 20.29 20.00 21.66 19.31 19.52 20.30 20.00 19.94 19.72 17.01 18.00 18.00 16.00 16.00 12.74 14.00 14.00 11.43 11.38 11.69 11.07 10.75 12.00 11.17 11.38 10.81 10.84 10.47 12.00
Slide 19: Interest Spread
INTEREST SPREAD Yearly (%) Quarterly (%) 26 26.00 25.07 24 24.00 21.67 22.34 21.66 22 21.43 22.00 19.94 19.72 20.27 19.72 19.31 20.29 20.30 20 20.00 19.52 18 15.42 18.00 16 16.00 14 14.00 11.88 11.53 12.20 12.42 11.88 10.77 10.56 10.85 12 10.85 10.93 10.90 10.80 12.00 10.14 9.45 9.52 9.65 9.24 8.96
Slide 20: Return on Average Retail Loan Asset
RETURN ON AVERAGE RETAIL LOAN ASSET Attractive returns over the years Yearly (%) Quarterly (%) 5.00 5.00 4.40 4.47 4.75 4.50 4.21 4.24 4.45 4.50 4.28 4.30 4.05 4.00 4.00 3.49 3.50 3.22 3.32 3.50 3.03 3.00 3.00 2.50 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 2.50 Q4 FY 2017 Q3 FY
Slide 21: Non-Performing Assets & Bad Debts
NON-PERFORMING ASSETS & BAD DEBTS Non-Performing Assets (` in million) Mar-17 Dec-16 Sep-16 Jun-16 Mar-16 Gross Non-Performing Assets 5,621 7,863 6,016 5,618 7,025 Provision For Non-Performing Assets 1,019 1,019 1,019 1,019 1,019 Net Non-Performing Assets 4,602 6,844 4,997 4,599 6,006 % of Gross NPA
Slide 22: Liability Mix
LIABILITY MIX Maintaining a diversified funding profile (%) 3 Secured Non-Convertible Debentures (Muthoot Gold Bonds) – ` 25,190 mn (12%) 2 15 12 Secured Non-Convertible Debentures – Listed – ` 37,098 mn (18%) 18 Borrowings from Banks/Fis - ` 92,019 mn (44%) 7 Subordinated Debt – ` 15,458 mn (7%) Su
Slide 23: Credit Ratings
CREDIT RATINGS Highest Rating among gold loan companies Short-term Rating Amt of rating Rating Indicates (` in million) COMMERCIAL PAPER Very strong degree of safety with regard to timely CRISIL 40,000 CRISIL A1+ payment of financial obligation and carry lowest credit risk ICRA 2,000 ICRA A1+ Very s
Slide 24: Break-up of Gross Income
BREAK-UP OF GROSS INCOME Interest Income (` in million) Yearly Quarterly 60,000 56,553 60,000 53,641 50,000 49,077 48,130 50,000 45,280 42,703 40,000 40,000 30,000 30,000 22,983 16,995 20,000 20,000 13,280 13,526 12,752 10,775 10,000 10,000 6,062 0 0 Q4 FY 2017 Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 Mar-0
Slide 25: Operating Expenses to Average Retail Loans
OPERATING EXPENSES TO AVERAGE RETAIL LOANS Operational efficiency over the years Yearly (%) Quarterly (%) 8.50 8.34 8.50 8.00 8.00 7.50 7.50 7.00 7.00 6.50 6.50 6.00 6.00 5.45 5.63 5.50 5.50 5.01 5.10 4.80 4.92 5.00 4.72 5.00 4.46 4.28 4.30 4.50 4.50 4.02 4.08 4.00 4.00 3.50 3.50 Mar-09 Mar-10 Mar-1
Slide 26: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (` in Millions) Quarterly (` in Million) Q4 FY Q3 FY Q2 FY Q1 FY Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 2017 2017 2017 2017 Personnel Expenses 7,280 6,418 6,304 5,917 5,453 4,145 2,209 1,169 677 1,801 1,734 1,896 1,849 Rent 1,808 1,713 1,
Slide 27: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (%) Quarterly (%) Q4 FY Q3 FY Q2 FY Q1 FY Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 2017 2017 2017 2017 Personnel Expenses 48 49 53 52 52 49 43 43 42 31 57 57 58 Rent 12 13 14 14 12 12 12 11 8 8 15 14 13 Advertisement 3 5 5 6 5 10 13 12 13 3
Slide 28: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) Q4 FY Q3 FY Q2 FY Q1 FY (Based on Income) Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 2017 2017 2017 2017 Interest expense to Gross 39.92 46.31 48.71 53.08 52.34 52.10 44.83 43.49 49.94 31.87 44.34 42.83 42.83 Income Selling, general a
Slide 29: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) (Based on Average Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 Q4 FY Q3 FY Q2 FY Q1 FY Retail Loans) 2017 2017 2017 2017 Interest income to avg. 21.43 19.72 19.30 20.27 21.66 22.34 19.72 19.94 21.67 25.07 19.52 20.29 20.30 retail loans
Slide 30: Profitability
PROFITABILITY Efforts getting rewarded Profitability at a glance (` in million) Yearly PBT PAT Quarterly PBT PAT 20,000 19,210 20,000 18,000 18,000 16,000 15,114 16,000 14,000 13,312 13,168 14,000 11,936 11,798 12,000 10,279 12,000 10,042 10,000 10,000 7,612 8,000 8,920 8,000 7801 8,096 5,893 6,000
Slide 31: Net Worth
NET WORTH Steady capital position Share Capital and Reserves & Surplus (` in million) 70,000 64,825 65,164 61,892 60,000 58,915 56,192 50,000 50,835 37,356 42,646 40,000 29,257 30,000 20,000 13,344 10,000 5,845 3,712 0 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar-14 Mar- 15 Mar-16 Jun-16 Sep-16 Dec-16 Mar
Slide 32: Return on Equity
RETURN ON EQUITY Stable shareholder value creation Return on Average Equity Yearly (%) Quarterly (%) 55 30 48.10 51.52 50 45 25 41.90 19.80 19.65 40 18.37 18.78 20 35 33.90 30.15 15 30 25 19.44 10 20 19.50 15 5 14.35 15.13 10 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 0 Q4 FY 201
Slide 33: Capital Ratio
CAPITAL RATIO Maintaining capital well above the statutory requirement Capital Adequacy Ratio (%) Mar-17 Dec-16 Sep-16 Jun-16 Mar-16 Capital Adequacy Ratio 24.88 24.66 23.67 24.27 24.48 Tier-I 21.78 22.17 20.95 21.03 20.92 Tier-II 3.10 2.49 2.72 3.24 3.56 32
Slide 34: Market Value Ratio
MARKET VALUE RATIO Equity market valuation ratios indicate potential for upside FY 2017 FY 2016 Q4 FY 2017 Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 Earnings per share (`) - Basic 29.56 20.34 8.06 7.29 7.44 6.77 - Diluted 29.45 20.10 8.13 7.23 7.38 6.71 Mar-17 Dec-16 Sep-16 Jun-16 Mar-16 Book Value per share
Slide 35: Capitalisation Ratios
CAPITALISATION RATIOS Headroom for further leveraging (` In million) Mar-17 Dec-16 Sep-16 Jun-16 Mar-16 Outside Liabilities 241,966 235,598 243,582 226,641 214,295 Cash & Bank Balances 15,343 13,377 16,181 12,481 6,791 Tangible Networth 65,104 64,773 61,839 58,862 56,146 Capital Gearing 3.48 3.43 3.
Slide 36: Team Strength
TEAM STRENGTH Groomed human capital over the years to meet growing business requirements (No. of Employees) 28000 25,351 24,881 25,012 24,205 23,961 24,150 22,882 23,165 23000 22,781 18000 16,688 13000 9,745 8000 5,979 3000 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Sep-16 Dec-16
Slide 37: Our Subsidiary: Asia Asset Finance PLC
OUR SUBSIDIARY & Muthoot Finance ASIA ASSET FINANCE PLC The unconventional finance company 36
Slide 38: Asia Asset Finance PLC – An Overview
ASIA ASSET FINANCE PLC – AN OVERVIEW Asia Asset Finance PLC, (AAF) Colombo, Sri Lanka became a foreign subsidiary of Muthoot Finance on December 31, 2014 . As on March 31, 2017, total holding in AAF stood at 503 million equity shares representing 60% of their total capital. The loan portfolio stands
Slide 39: Products
PRODUCTS o Fixed Deposits o Mortgage Loans o Leasing o Factoring o Business Loan o Short Term Loans o Personal Loan o Micro Finance o Group Personal Loan o Loan against Gold Jewellery o Corporate Loans 38
Slide 40: Branch Network
BRANCH NETWORK AAF has operations in various parts of Sri Lanka providing the best services and easy access to clients 39
Slide 41: Key Financial Parameters
Key Financial Parameters (LKR in millions) Particulars FY 2017 FY 2016 Q4 FY 2017 Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 LKR / INR 0.42113 0.43691 0.42113 0.44929 0.44498 0.44908 Number of branches 15 15 15 15 15 15 Number of Employees 448 358 448 433 410 393 Loan Portfolio (LKR) 8,662 6,854 8,662 8,560 8
Slide 42: Our Subsidiary: Muthoot Homefin
OUR SUBSIDIARY Muthoot Homefin
Slide 43: Muthoot Homefin – An Overview
MUTHOOT HOMEFIN – AN OVERVIEW Muthoot Homefin (India) Limited is a Housing Finance Company registered with The National Housing Bank (NHB). It is a subsidiary of Muthoot Finance Limited . As on March 31, 2017, Muthoot Finance holds 88.27% of equity capital of MHIL. MHIL focuses on extending affordab
Slide 44: Business Performance
Business Performance (` in millions) Particulars FY 2017 FY 2016 Q4 FY 2017 Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 Number of branches 9 2 9 8 8 2 Number of Sales Offices 110 0 110 110 39 39 Number of Employees 111 30 111 105 77 49 Loan Portfolio (`) 4,408 315 4,408 2,040 946 441 Capital Adequacy Ratio (%)
Slide 45: Business Performance
Business Performance (%) Particulars FY 2017 FY 2016 Q4 FY 2017 Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 Yield on Advances 12.74 6.63 13.05 13.13 11.94 9.75 Interest Spread 3.31 - 3.66 3.49 2.25 - Return on Assets (ROA) 2.42 0.08 3.26 3.08 1.75 (4.64) Return on Equity (ROE) 3.64 4.00 9.82 4.32 1.42 (3.10) D
Slide 46: Financial Highlights and Growth Drivers
• Disbursements in FY 2017: Rs 4,158 mn, Growth 13x over FY16. Loan Book as on March 31, 2017: Rs 4,408 mn Financial • Average Ticket Size in FY 2017: Rs.1.2 mn • Business Presence: Maharashtra, Gujarat, Rajasthan, Madhya Pradesh and Kerala Highlights • ROA for FY 2017: 2.42%, ROE for FY 2017: 3.64%
Slide 47: Our Subsidiary: Muthoot Insurance Brokers
& Muthoot Finance Muthoot Insurance Brokers
Slide 48: Muthoot Insurance – An Overview
MUTHOOT INSURANCE – AN OVERVIEW MIBPL became a wholly owned subsidiary of Muthoot Finance Ltd in June 2016. MIBPL is an unlisted private limited company holding a licence to act as Direct Broker from IRDA since 2013. It is actively distributing both life and non-life insurance products of various in
Slide 49: Key Business and Financial Parameters
Key Business Parameters (` in millions) Particulars FY 2017 FY 2016 Q4 FY 2017 Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 Premium Collection (` ) 697 482 259 148 188 102 Number of Policies 566,282 458,652 176,929 114,133 139,008 136,212 Key Financial Parameters (` in millions) FY 2017 FY 2016 Total Revenue (`
Slide 50: Our Subsidiary: Belstar Investment and Finance
&) OU R SU BS IDIARY Muthoot Finance &y BELSTAR INVESTMENT AND FINANCE PRIVATE LIMITED A Subsidiary of Muthoot Finance Limited 49
Slide 51: Belstar Investment and Finance – An Overview
BELSTAR INVESTMENT AND FINANCE – AN OVERVIEW As Of March 2017 , Muthoot Finance holds 64.60% in BIFPL . BIFPL was incorporated on January 1988 at Bangalore and the Company was registered with the RBI in March 2001 as a Non- Banking Finance Company. The Company was reclassified as “NBFC- MFI” by RBI
Slide 52: Key Financial Parameters
Key Financial Parameters (` in millions) Particulars FY 2017 FY 2016 Q4 FY 2017 Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 Number of branches 155 76 155 148 103 94 Number of Employees 1,093 561 1,093 1,008 828 705 Loan Portfolio (`) 5,668 2,643 5,668 4,537 3,986 2,872 Capital Adequacy Ratio (%) 17 17 17 21 21
Slide 53: Registered Office
REGISTERED OFFICE 2nd Floor, Muthoot Chambers Opposite Saritha Theatre Complex Banerji Road, Kochi Kerala – 682 018. India Tel: (91484) 2394712 Fax: (91484) 2396506 CIN: L65910KL1997PLC011300 RBI Reg No: N.16.00167 EMAIL (Individual & Corporate Investors) investors@muthootfinance.com (Institutional