Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q2 FY2020 Earnings Presentation
79 slides from Edelweiss Financial Services's earnings presentation, Nov 12, 2019
Slide 1: Cover letter to National Stock Exchange
EVV/Sec/2019/323 November 12, 2019 National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai- 400 051. Dear Sirs, Ref.:- Symbol: EDELVVEISS Sub: Investor Presentation Please find enclosed the Investor Presentation on Earnings Updates for the quarter and half y
Slide 2: Q2FY20 Earnings Update
Edelweiss Financial Services Limited Q2FY20 Earnings Update
Slide 3: Contents
Contents 1 Quarterly Performance Highlights 2 Business Performance Highlights 3 Liquidity Management 4 Balance Sheet Highlights 5 ESG at Edelweiss 6 Addenda 2
Slide 4: Quarterly Performance Highlights – Q2FY20
Quarterly Performance Highlights – Q2FY20
Slide 5: Financial Snapshot – Q2FY20
Financial Snapshot – Q2FY20 INR Cr EOP Equity Profit after Tax Total Pre Minority 9,870 68 Credit 5,860 37 Asset Reconstruction 2,236 73 Advisory 214 53 Insurance 945 (68) BMU & Corporate 615 (26) Minority Interest (MI) 2,096 17 Total Consolidated Post MI 7,773 51 Total Ex-Insurance Post MI 7,236 93
Slide 6: Q2FY20 Overview
Q2FY20 Overview 1 In line with our stated strategy of focusing on enhancing capital light business model: • Signed co-origination agreements with SBI,CBI and PNB in addition to BOB signed last quarter • Securitized retail credit book of INR 702 Cr during the quarter 2 Asset Reconstruction business c
Slide 7: Key Actions Taken - Liquidity, Asset Quality and Balance Sheet
Key Actions Taken - Liquidity, Asset Quality and Balance Sheet Liquidity • We continue to maintain liquidity at ~17% of balance sheet; No change anticipated in our stated liquidity plan • Overall Liquidity maintained at ~INR 8,400 Cr including undrawn bank lines of INR ~1,000 Cr Asset Quality • We h
Slide 8: Launch of Completion Financing Platform
Launch of Completion Financing Platform • Launched India’s first completion financing platform for the real estate sector • Platform will house funds that will buy out existing real estate loans and provide requisite completion financing; Funds will be managed by Edelweiss’ Alternative Asset Managem
Slide 9: Fund Raise in EGIA - $150 mn Target Raise
Fund Raise in EGIA - $150 mn Target Raise • Sanaka Growth SPV I Ltd (part of Sanaka Capital) has committed to invest ~$44 mn (~INR 308 Cr) of growth equity in EGIA in the form of compulsorily convertible instrument • We and Sanaka are in talks with other investors alongside for a further investment
Slide 10: We Continue to Forge Strong Partnerships
We Continue to Forge Strong Partnerships CDPQ Tokio Marine Allianz Bank of Singapore We are proud to have been chosen by partners who embody the highest standards of quality and governance 9
Slide 11: PPOP Remains Adequate For Enhanced Credit Costs
PPOP Remains Adequate For Enhanced Credit Costs PPOP Credit costs (INR Cr) 3,000 2,530 2,500 2,287 2,000 1,820* 1,492 1,500 933 1,000 892* 733 676 456 500 319 134 160 910 446 0 FY15 FY16 FY17 FY18 FY19 H1FY20 While the enhanced credit costs will impact P&L for FY20, we do not expect any balance shee
Slide 12: PAT Distribution Across Businesses
PAT Distribution Across Businesses (INR Cr) Q2FY19 Q1FY20 Q2FY20 Total Consolidated Post MI PAT 272 132 51 Credit 215 111 37 Asset Reconstruction 34 63 44 Advisory 76 68 53 Insurance (50) (50) (42) BMU & Corporate (2) (59) (41) Total Ex-Insurance Post MI PAT 322 182 93 Balance Sheet 59,433 54,513 49
Slide 13: Key Profitability Ratios
Key Profitability Ratios Ex-Insurance Q2FY19 Q1FY20 Q2FY20 PPOP 4.6% 4.0% 2.8% Credit Costs 0.9% 1.9% 1.5% RoA 2.5% 1.7% 1.0% RoE 19.1% 10.2% 5.1% Cost to Income Ratio 47% 50% 56% Consolidated Q2FY19 Q1FY20 Q2FY20 RoA 1.9% 1.0% 0.5% RoE 14.7% 6.8% 2.6% Cost to Income Ratio 61% 67% 73% Ex-Insurance R
Slide 14: Diversified Business Model…
Diversified Business Model… Business Segments (INR Cr) Q2FY20 Pre MI PAT % Contribution Retail Credit 31 23% Corporate Credit 6 4% Asset Reconstruction Business 73 54% Wealth Management and Capital Markets 38 28% Asset Management 15 11% BMU & Corporate (26) (20%) Total Ex- Insurance Pre MI PAT 136 1
Slide 15: Steady Growth in Customer Assets
Steady Growth in Customer Assets As on 30th September, 2019 (rounded off to nearest 100) INR Cr YoY Growth Customer Assets 2,02,400 7% Assets under Advice (Wealth Management) 1,07,800 10% Funds under Management (Asset Management) 34,900 2% Asset Reconstruction (ARC) Assets under Management 38,200 (5
Slide 16: Debt Equity Ratio declines further to 3.4x
Debt Equity Ratio declines further to 3.4x D/E (Excluding Treasury Assets) 5.2 5.2 5.0 5.0 4.4 3.7 3.4 FY15 FY16 FY17 FY18 FY19 Q1FY20 Q2FY20 15
Slide 17: Business Performance Highlights: Credit
Business Performance Highlights CREDIT Retail Credit – Corporate Credit
Slide 18: Credit Business Mix
Credit Business Mix Capital As on 30th September, 2019 Employed % (INR Cr) Retail Credit 15,111 48% Retail Mortgage 8,075 26% Blend of loans to home owners and home buyers SME & Business Loans 3,821 12% Under-served and highly scalable market, key focus area ESOP and Margin Financing 2,943 9% Cateri
Slide 19: Credit Business at a Glance
Credit Business at a Glance Credit Business (INR Cr) Q1FY20 Q2FY20 Capital Employed 33,968 31,289 Average Interest Yield 15.9% 14.6% Average Cost of Borrowing 10.3% 10.5% Net Interest Margin 7.0% 5.6% Net Interest Income 619 461 Cost to Income 41% 49% Pre Provisioning Operating Profit 367 237 Credit
Slide 20: Credit Business Performance Snapshot
Credit Business Performance Snapshot Q2FY20 (INR Cr) Total Retail Corporate EOP Capital Employed 31,289 15,111 16,178 EOP Equity 5,860 2,502 3,358 Net Interest Income 461 221 240 PAT 37 31 6 Net Interest Margin 5.6% 5.6% 5.7% Cost to Income 49% 48% 49% RoA 0.4% 0.8% 0.1% RoE 3.2% 6.9% 0.8% 19 All fi
Slide 21: Asset Quality at a Glance
Asset Quality at a Glance As on 30th September,19 (INR Cr) Q1FY20 Q2FY20 Credit Book 32,328 29,725 Of which Stage 3 752 810 ECL Provision 836 803 Of which Stage 3 352 317 Specific Provision Cover 47% 39% Total Provision Cover 111% 99% Gross NPA 2.33% 2.73% Net NPA 1.24% 1.66% 20 Credit Book excludes
Slide 22: Retail Credit
Retail Credit Capital Employed SME Retail Mortgage (INR Cr) Secured Unsecured HL LAP Average Yields % 14% 23% 11% 13% Median Ticket Size (INR) ~1 Cr 7 lacs 15 lacs 19 lacs 20,623 Average LTV ~75% -85% - ~50%-60% 16,981 15,111 Locations (#) 108 100 Loan Book - Geographical Split 19% 15% 1% 34% 33% 43
Slide 23: Corporate Credit
Corporate Credit Capital Employed Structured Wholesale (INR Cr) Collateralised Mortgage Credit Average Yields % 15% - 17% 17% - 19% 21,100 Portfolio Granularity 67 accounts 162 projects 16,987 16,178 Typical Ticket size INR 100-125 Cr Exposure in Top 10 Accounts 22% Top 10 Accounts Others Q2FY19 Q1F
Slide 24: Business Performance Highlights: Advisory
Business Performance Highlights ADVISORY Wealth Management – Asset Management – Capital Markets
Slide 25: Advisory Business Performance Snapshot
Advisory Business Performance Snapshot Wealth Asset Capital Q2FY20 (INR Cr) Total Management Management Markets Net Revenue 257 127 60 70 PAT 53 33 15 5 Cost to Income 71% 64% 66% 88% PAT Yield - 13 bps 16 bps - Assets under Assets under Assets under Custody and Advice Management Customer Assets Cle
Slide 26: Wealth Management
Wealth Management Assets Under Advice As on Number of AUA Number of 30th Sept’19 Clients (INR Cr) RMs (INR Cr) Ultra High Net ~2,410 83,500 161 Worth Individuals 106,600 107,800 Affluent Investors ~5,25,300 24,300 781 98,000 Wealth AUA Breakup 27% 26% 30% 29% 26% 96,300 73% 74% 70% 71% 74% Q2FY19 Q1
Slide 27: Asset Management
Asset Management Alternative Assets – Private Credit (INR Cr) Public Markets (INR Cr) Mutual Fund Multi Strategy Funds and PMS 19,400 19,700 15,400 6,700 6,000 5,200 13,300 10,900 11,000 Q2FY19 Q1FY20 Q2FY20 Q2FY19 Q1FY20 Q2FY20 Alternative Assets AUM as on 30th Sep 19 Deployment in Alternative Asse
Slide 28: Net New Flows in Wealth and Asset Management
Net New Flows in Wealth and Asset Management Wealth Management AUA Movement in Q2FY20 Asset Management AUM Movement in Q2FY20 (INR Cr) (INR Cr) 3,300 (2,100) 101,100 (440) 40 106,600 1,07,800 36,300 35,900 Opening AUA Net New Market Closing AUA Opening AUM Net New Market Closing AUM Money Movement M
Slide 29: Capital Markets
Capital Markets Key Equity Capital Market & Advisory Transactions Private Equity Placement Initial Public Offering Buyback July 2019 July 2019 September 2019 Sole Financial Advisor BRLM Sole Manager Key Debt Capital Market Transactions Public Issue Public Issue Public Issue Public Issue August 2019
Slide 30: Business Performance Highlights: Asset Reconstruction
Business Performance Highlights Asset Reconstruction
Slide 31: Asset Reconstruction Business Performance Snapshot
Asset Reconstruction Business Performance Snapshot INR Cr Q1FY20 Q2FY20 AUM 47,463 47,029 EOP Capital Employed 8,631 8,765 EOP Equity 2,158 2,236 Net Interest Income 204 179 Credit Costs 26 17 PAT 105 73 Net Interest Margin 11.2% 8.3% Cost to Income 22% 28% RoA 5.8% 3.4% RoE 22.3% 13.1% 30 All figur
Slide 32: Asset Reconstruction Overview
Asset Reconstruction Overview AUM Funding profile of Edelweiss’s Contribution in ARC (INR Cr) (INR Cr) Edelweiss Contribution Investors Contribution 22% 26% Equity Debt INR 8,800 Cr Participatory NCDs 52% 40,300 38,800 38,200 ARC Recoveries (INR Cr) 1,076 827 670 7,300 8,600 8,800 Q2FY19 Q1FY20 Q2FY
Slide 33: Resolution Strategy and Top Industry Exposures
Resolution Strategy and Top Industry Exposures SRs Issued : Resolution Strategy wise Break-up SRs outstanding : Top 10 industry exposure % Steel Power 12% Restructuring Infrastructure 26% 23% 9% Real Estate 39% NCLT Paper Enforcement Textiles 14% 3% 12% 4% Chemicals Exited 4% 6% 8% Ship Building 26%
Slide 34: Strong Sourcing Ability and a Robust Pipeline
Strong Sourcing Ability and a Robust Pipeline Deals in pipeline spread across sectors Deep Banking Relationships Real Estate • Our Asset Reconstruction business has 14% Steel acquired assets from over 65 banks/FIs since Hotels inception 40% 11% Textiles • Knowledge of the portfolios of banks Enginee
Slide 35: Model on Revenue Stream
Model on Revenue Stream Sources of Revenue Management Fees & Incentive Redemption and Upside on ownership of Security Receipts Management Fees Incentive Upside Sharing Fees to ARC for carrying An income for the asset Upside sharing is the sharing activities as trustee to manager to expedite and of t
Slide 36: How do ARC Economics work?
How do ARC Economics work? Assuming asset with book value INR 200 is sold to ARC at INR 100 - Bank contributes INR 85 and ARC INR 15 Assuming a time period of 5 years Case 1 Case 2 Case 3 Recovery Assumption (A) 100 125 150 Management Fee @ 2% p.a. (B) 10 10 10 Recovery Incentive @ 1.5% of recovery
Slide 37: Snapshot of ARC Economics for H1FY20
Snapshot of ARC Economics for H1FY20 INR Cr H1FY20 Nominal Value of debt acquired 1,14,227 Price paid @ avg. 50% discount 55,822 Capital Employed 8,765 Net Interest Income 383 PAT 178 NII of 9.6% on average capital employed and RoA 4.5% and RoE of 17.3% for H1FY20 36 Debt Acquisition and Price paid
Slide 38: Business Performance Highlights: Insurance
Business Performance Highlights INSURANCE Life Insurance – General Insurance
Slide 39: Life Insurance Performance Snapshot
Life Insurance Performance Snapshot (INR Cr) Q2FY19 Q2FY20 Y-o-Y Growth Net Premium Income 180 218 21% Investment Income & Other Income 16 45 185% Total Business 196 263 34% Profit After Tax (74) (54) - Minority (37) (26) - Edelweiss’ Share in PAT (38) (28) - Net Worth 982 832 121 branches and 46,30
Slide 40: Life Insurance – Long Term Value Creation
Life Insurance – Long Term Value Creation Product Mix Solvency Ratio New Business Premium Q2FY20 219% 229% 211% 25% 45% 9% 21% Traditional Non Par ULIP Group Traditional Par FY18 FY19 H1FY20 Channel Mix 13th Month Overall Rate Persistency New Business Premium Q2FY20 80% 83% 78% 8% Agency Banca & Cor
Slide 41: Life Insurance Scaling Rapidly
Life Insurance Scaling Rapidly Collected Individual Annual Premium Equivalent Number of Policies Issued (Individual business ) CAGR growth since FY17 (in 000) 39% 21 17 24% 12 15% Edelweiss Tokio Peer Set Industry Q2FY18 Q2FY19 Q2FY20 Life Insurance • Collected Individual Annual Premium Equivalent (
Slide 42: General Insurance
General Insurance Product Mix - Q2FY20 Channel Mix - Q2FY20 7% 7% Online 21% 24% Motor Agency 11% 19% Motor Dealers Health & PA Broker 9% Edelweiss Retail Others Corporate Direct 55% 47% • Gross Written Premium at INR 58 Cr - growth of 67% YoY • Contribution of profitable Motor Own Damage line is 63
Slide 43: Liquidity Management
Liquidity Management Ge E Edelweiss s protect
Slide 44: Maintained Sufficient Liquidity
Maintained Sufficient Liquidity FY 16 FY 17 FY 18 FY 19 H1FY20 Available Liquidity 4,000 5,800 10,600 10,100 8,400 Balance Sheet Size* 27,400 36,900 51,800 51,900 48,600 Liquidity % 15% 16% 20% 19% 17% 43 * Excludes Asset Specific Borrowings (ASB)
Slide 45: Cash Flow Plan
Cash Flow Plan Particulars (INR Cr) Q3FY20 Q4FY20 Q1FY21 Q2FY21 Opening Available Liquidity (A) 8,400 8,000 8,800 8,500 Inflows Asset EMIs and Repayments 2,000 2,800 1,800 1,500 Securitization 1,000 1,000 1,000 - Fresh Borrowings 2,500 2,100 1,700 2,500 Total Inflows (B) 5,500 5,900 4,500 4,000 Outf
Slide 46: Assets in each Period Adequately Covering the Liabilities
Assets in each Period Adequately Covering the Liabilities Assets Liabilities Gap Upto 1 year 15,300 14,100 1,200 1-3 years 16,600 15,400 1,200 3 years+ 16,700 9,200 7,500 Total gap represents our equity base 45 3 years+ liabilities exclude Equity; Assets and Liabilities don’t include ASB
Slide 47: Balance Sheet Highlights
Balance Sheet Highlights Ge E Edelweiss s protect
Slide 48: Diversified Borrowing Profile By Instruments…
Diversified Borrowing Profile By Instruments… 40% 44% 44% 57% 57% NCDs Bank Loans 31% 29% 39% CPs 40% 43% 29% 27% 17% 3% 0% FY16 FY17 FY18 FY19 H1FY20 Total Borrowings 23,034 31,581 44,761 43,201 38,695 (INR Cr) Negligible CP exposure as on 30th September, 2019 47 Borrowings exclude CBLO for all the
Slide 49: …And By Source
…And By Source 36% 33% Bank 43% 47% 49% Retail 16% 17% 12% MF 24% 27% 44% 33% 41% PF, Insurance 16% 10% & FIs 12% 13% 14% 6% 7% FY16 FY17 FY18 FY19 H1FY20 Total Borrowings 23,034 31,581 44,761 43,201 38,695 (INR Cr) Increasing focus on retail borrowings in the total liability mix 48 Borrowings exclu
Slide 50: Increasing Percentage of Long Term Borrowings
Increasing Percentage of Long Term Borrowings % of Total Borrowings (excl ASB) 63% 64% 61% 54% 44% FY16 FY17 FY18 FY19 H1FY20 49
Slide 51: Positive ALM Across Durations
Positive ALM Across Durations Assets Liabilities 100% 100% % of Assets and Liabilities 66% 62% 33% 24% 19% 31% 2% 21% 16% 2% Asset Specific 0-3 months 3-6 months 6-12 months 1-3 years 3+ years Borrowing • BMU manages ALM under the aegis of Asset Liability Committee 50
Slide 52: Comfortable Capital Adequacy Ratio
Comfortable Capital Adequacy Ratio Capital Structure as on 30th Sept, 2019 (INR Cr) Core Equity Tier I 8,310 15.6% Capital Adequacy Ratio Additional Tier I 345 0.6% 21.1% Tier II 2,589 4.9% Total Capital 11,244 51 Capital Adequacy Ratio is based on RBI norms for NBFCs; Tier II includes CDPQ investme
Slide 53: Debt to Equity Ratio Reduced Further
Debt to Equity Ratio Reduced Further Capital Structure as on 30th Sept, 2019 (INR Cr) Total Debt 38,695 Less: Treasury Assets 4,658 Net Debt (Ex-Treasury Assets) 34,037 Equity 9,870 D/E ratio (Ex- Treasury Assets) 3.4x 52 Total Debt excludes ASB ; Equity includes CDPQ investment of INR 1,040 Cr
Slide 54: Our Risk Governance Structure…
Our Risk Governance Structure… Oversight by Board Risk Committee Global Risk Committee Business Risk Group Risk & Assurance Enterprise Risk Management Council • Implementation of risk • Risk aggregation and • Define Organization risk framework for specific monitoring framework & appetite businesses
Slide 55: …Ensures Prudent Risk Management and Responsible Growth
…Ensures Prudent Risk Management and Responsible Growth Market Risk Regulatory Reputational Business Risk Credit Risk Liquidity Risk Risk Risk Physical Technology Operational & Infrastructure People Risk Fraud Risk Risk Process Risk Risk Enterprise risk management approach: 11 Risk Framework 54
Slide 56: 13 Member Board Comprises Majority of Independent Directors
13 Member Board Comprises Majority of Independent Directors Mr. K Chinniah Mr. Biswamohan Mahapatra Independent Director Independent Director • Served as Managing Director & Global Head • Former RBI Executive Director, chaired various committees of RBI Infrastructure, Portfolio, Strategy & Risk Grou
Slide 57: Significant Institutional Ownership
Significant Institutional Ownership Shareholding Pattern as on 30th September, 2019 Key Shareholders above 1% Percent 1 BIH SA 4.3% Employee 2 Pabrai Investment Funds 3.6% Trust 3 Wellington Management 2.6% DIIs, Non 4.8% Promoter Group 4 LIC 2.1% Institutions & Others 5 HDFC Mutual fund 2.0% 23.7%
Slide 58: ESG at Edelweiss
ESG at Edelweiss
Slide 59: Our Framework is based on the United Nations Sustainable Development Goals
Our Framework is based on the United Nations Sustainable Development Goals People Focused Goals No Poverty, Zero Hunger & Quality Education Gender Equality Economic Growth Planet Focused Goals Affordable & Clean Energy Responsible Consumption Climate Support 58
Slide 60: EdelGive Foundation - Unique Philanthropic Platform
EdelGive Foundation - Unique Philanthropic Platform PARTNERSHIPS CAPACITY BUILDING IMPACT Non-Financial Support Foundations Build Stronger Organizations Organizational Capacity Towards a high impact social sector EdelGive platforms EdelGive Non-Profit Corporates Foundation Organization Enhanced Soci
Slide 61: EdelGive Funding Partners
EdelGive Funding Partners We have partnered with some of the largest foundations, Corporates and HNIs through our innovative models focused on collaboration 60
Slide 62: EdelGive is supported by Funding Partners of Four Categories
EdelGive is supported by Funding Partners of Four Categories International Foundations Bill and Melinda Gates Foundation Savannah Wisdom Children’s Investment Fund Foundation Ford Foundation Dalyan Foundation British Asian Trust International Funders Burgundy Asset Management atDta General Atlantic
Slide 63: EdelGive NGO Partners
EdelGive NGO Partners Education Working to improve Student Learning Outcomes by leveraging Government systems Empowerment Women Working to enable economic and social empowerment of women Livelihoods 62 Working to improve livelihoods in agrarian communities through water related interventions
Slide 64: EdelGive Foundation - Key Metrics
EdelGive Foundation - Key Metrics Employee Engagement Employee Engagement % More than 70% engaged in financial and nonfinancial giving Man Hours spent till date 33,170 hrs Field Visits till date 168+ Capacity Building – Non financial support Employees provided skills and time pro bono in over 100+ p
Slide 65: Addendum to Q2FY20: Business Strategy Going Forward
Addendum to Q2FY20 Earnings Update Business Strategy Going Forward
Slide 66: Edelweiss Business Group Structure
Edelweiss Business Group Structure Edelweiss Financial Services Ltd Credit Advisory Insurance • Retail Credit • Wealth Management • Life Insurance • Corporate Credit & Capital Markets • General Insurance • Asset Management & Asset Reconstruction Six businesses across three ring fenced verticals • Ou
Slide 67: Edelweiss Strategy FY20-23
Edelweiss Strategy FY20-23 Line of Business Strategy Benefits Retail Credit • Will work largely in partnership with • Equity Release: Equity in the Corporate Credit will be banks for Co-origination released as we wind down the book Corporate Credit • Showcase our workout capabilities • Financing : G
Slide 68: Retail Credit
Retail Credit Key Metrics Business Strategy H1FY20 INR Cr • Continue our focus on growing in niche segments especially in SME and Affordable Housing Loans in partnership with banks Capital Employed 15,111 Equity 2,502 • Move from Tech-enabled to Tech-first approach – revamp of customer outreach and
Slide 69: Corporate Credit
Corporate Credit Key Metrics Business Strategy H1FY20 INR Cr • Book is going through a down cycle and is expected to reverse in next 3-4 quarters Capital Employed 16,178 Equity 3,358 • Asset Management vehicles have proved to be a better source of long term stable and flexible capital for non-granul
Slide 70: Asset Management & Asset Reconstruction Business
Asset Management & Asset Reconstruction Business Key Metrics Business Strategy H1FY20 INR Cr • We manage ~INR 83,000 Cr of combined customer assets with our capital contribution of ~INR 10,000 Cr AUM 82,900 Equity 2,306 • Continue to maintain dominance in Asset Reconstruction business with the oppor
Slide 71: Wealth Management and Capital Markets
Wealth Management and Capital Markets Key Metrics Business Strategy H1FY20 INR Cr • Achieved leadership position especially in affluent segment which is one of the fastest growing segments AUA 1,07,800 AUC 21,500 • Strong technology platform and product capabilities already built Equity 144 • Abilit
Slide 72: Insurance
Insurance Life Insurance Life Insurance Business Strategy H1FY20 INR Cr • Increase Protection and Non Par products share to boost margins • Multi-channel distribution strategy while ramping up proprietary channels Equity 832 like Direct and Agency PAT (128) • Our 51% JV with Tokio Marine ensures bot
Slide 73: Addendum to Q2FY20: Indian Real Estate Snapshot
Addendum to Q2FY20 Earnings Update Indian Real Estate Snapshot
Slide 74: There is Significant Pessimism Around Real Estate..
There is Significant Pessimism Around Real Estate.. 1 Liquidity squeeze has created a severe cash crunch for most developers 2 Many projects are stuck for lack of last-mile financing 3 Undelivered homes, along with one or two cases of fraud, have created a very negative perception in the market 4 Ge
Slide 75: Reform-led Revival in Sales Volumes…
Reform-led Revival in Sales Volumes… Sales Trend 250 200 GST RERA Units in Thousands 150 100 DEMONETISATION 50 0 H1-2011 H1-2012 H1-2013 H1-2014 H1-2015 H1-2016 H1-2017 H1-2018 H1-2019 -7% CAGR +11% CAGR Sales from 2011 to 2017 Last 2 years 74
Slide 76: …has Rationalized Inventory Levels, Helped by Flat Pricing
…has Rationalized Inventory Levels, Helped by Flat Pricing Trends Selling Price and inventory levels 1,100 Unsold Inventory Pricing 6,000 Unsold Inventory, Units in Thousands 5,000 900 Pricing (INR/sft) 4,000 700 3,000 2,000 500 1,000 300 0 H1-2011 H2-2011 H1-2012 H2-2012 H1-2013 H2-2013 H1-2014 H2-
Slide 77: Balance Restored in Residential vs Commercial RE Asset Class Mix
Balance Restored in Residential vs Commercial RE Asset Class Mix Value of Assets Under Construction Residential Commercial 2011 2013 2017 2019 Q2 $160 Bn $234 Bn $257 Bn $278 Bn 14% 18% 23% 25% 75% 82% 86% 77% 2011 - 2013 2017 - Present • Rapid growth in Residential RE, led largely by • Investment i
Slide 78: Assets under watch is only ~2x of current stressed debt
Assets under watch is only ~2x of current stressed debt Developer Financing (Total Book) ‘000 Cr Banks 330 NBFCs 200 Total 530 • Estimated stress of ~15% translates to a book of INR 80,000 Cr • INR 80,000 Cr of total stressed debt would need ~40% of completion financing - ~INR 32,000 Cr • Government
Slide 79: 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
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