Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q1 FY2025 Earnings Presentation
54 slides from Edelweiss Financial Services's earnings presentation, Aug 2, 2024
Slide 1: Filing cover letter to stock exchanges
EW/Sec/2024-25/154 August 2, 2024 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 24
US $ version Edelweiss Financial Services Limited Earnings update – Quarter ended Jun 24
Slide 3: Contents
Contents 1 Overview and performance highlights for quarter ended Jun 24 3 2 Key focus areas 18 3 Important updates 23 4 Business performance 28 5 Governance & corporate responsibility 46 2
Slide 4: Overview and Performance Highlights
Overview and Performance Highlights Quarter ended Jun 24
Slide 5: Edelweiss at a glance – quarter ended Jun 24
Edelweiss at a glance – quarter ended Jun 24 Net Worth Ex-Insurance PAT $725 Mn $13 Mn Net Debt BVPS $1,523 Mn $0.6 (FV $0.1) 4
Slide 6: Diversified with seven high-quality businesses
Diversified with seven high-quality businesses Edelweiss Financial Services Ltd (EFSL) Alternative Asset Housing General Life Mutual Fund Reconstruction NBFC Asset Mgt Finance Insurance Insurance Edelweiss Edelweiss Edelweiss Asset ECL Finance Nido Home Zuno General Edelweiss Life Alternate Asset Re
Slide 7: Performance highlights – quarter ended Jun 24
Performance highlights – quarter ended Jun 24 1 Healthy profitability with steady growth in key business metrices Alternative AM FPAUM up 32% YoY to $3,876 Mn; AUM up 17% YoY to $6,752 Mn MF Equity AUM up 71% YoY to $6,291 Mn; AUM up 24% YoY to $16,297 Mn GI Gross Written Premium up 56% YoY to $28 M
Slide 8: Healthy profitability: Ex-Insurance PAT at $13 Mn
1 Healthy profitability: Ex-Insurance PAT at $13 Mn PAT for the quarter in $ Mn Alternative Asset Asset EFSL Consol Mutual Fund Management Reconstruction 7 8 10 10 6 3 5 1 Jun 23 Jun 24 Jun 23 Jun 24 Jun 23 Jun 24 Jun 23 Jun 24 17% YoY 44% YoY 147% YoY 6% YoY 7
Slide 9: Earnings distribution across businesses
1 Earnings distribution across businesses $ Mn Quarter Ended Business Jun 24 Jun 23 Alternative Asset Management 8 5 Mutual Fund 3 1 Asset Reconstruction 10 10 NBFC 3 4 Housing Finance 0 0 General Insurance (1) (5) Life Insurance (6) (3) Corporate (7) (4) EFSL Consolidated PAT (Pre MI) 10 9 (Less) M
Slide 10: Steady growth in key business metrices (1/3)
1 Steady growth in key business metrices (1/3) Alternative Asset Management AUM at $6,752 Mn, up 17% YoY; FPAUM at $3,876 Mn, up 32% YoY Real Assets strategy acquired assets of around $960 Mn of value Mutual Fund AUM at $16,297 Mn, up 24% YoY; Equity AUM at $6,291 Mn, up 71% YoY Equity net inflows o
Slide 11: Steady growth in key business metrices (2/3)
1 Steady growth in key business metrices (2/3) NBFC Disbursed $24 Mn of retail loans, up 24% YoY; 80% via CLM Wholesale book reduced by 37% YoY to $473 Mn Housing Finance Disbursed $38 Mn, up 80% YoY; 25% via CLM Partnership with State Bank of India continues to deepen 10
Slide 12: Steady growth in key business metrices (3/3)
1 Steady growth in key business metrices (3/3) General Insurance Gross Written Premium up 56% YoY to $28 Mn, one of the fastest growing in the industry Issued 1.2 lakh policies, up 73% YoY Life Insurance Gross Premium of $33 Mn, up 10% YoY AUM at $1,000 Mn, up 21% YoY 11
Slide 13: Customer reach expanded by 38% YoY
2 Customer reach expanded by 38% YoY in Lakhs General Insurance Customer Reach Mutual Fund Folios Customers 82 55 17 59 40 12 Jun 23 Jun 24 Jun 23 Jun 24 Jun 23 Jun 24 38% YoY 45% YoY 37% YoY 12
Slide 14: With a 13% YoY growth in customer assets
2 With a 13% YoY growth in customer assets in $ Mn Customer Alternative Asset Mgt Mutual Fund Assets AUM AUM 16,297 26,633 6,752 5,788 23,660 13,181 Jun 23 Jun 24 Jun 23 Jun 24 Jun 23 Jun 24 13% YoY 17% YoY 24% YoY 13
Slide 15: Robust balance sheet with well capitalised businesses
3 Robust balance sheet with well capitalised businesses Business Metric Value NBFC Capital Adequacy 43.4% Housing Finance Capital Adequacy 36.0% Asset Reconstruction Capital Adequacy 64.2% General Insurance Solvency Ratio 169% Life Insurance Solvency Ratio 170% 14
Slide 16: Net debt reduced by $320 Mn YoY
3 Net debt reduced by $320 Mn YoY $ Mn Net Debt ($ Mn) Business Jun 24 17% NBFC 565 1,843 Housing Finance 210 Alternative Asset Management 50 1,523 Asset Reconstruction 222 Corporate 1,092 Gross Debt 2,140 (Less) Liquidity 250 (Less) Liquid Investment* 366 Net Debt 1,523 Jun 23 Jun 24 15 * Liquid In
Slide 17: Cash flow plan
3 Cash flow plan $ Mn Jul 24 to Jun 25 Opening Available Liquidity (A) 252 Inflows Expected Inflows 1,007 Fresh Borrowings 216 Total Inflows (B) 1,222 Outflows Repayments 767 Disbursements 383 Total Outflows (C) 1,150 Closing Available Liquidity (A+B-C) 324 16
Slide 18: Assets in each tenor range adequately cover liabilities
3 Assets in each tenor range adequately cover liabilities $ Mn Assets Liabilities Excess / (Gap) Up to 1 year 1,486 1,330 156 1-3 years 1,234 1,210 24 3 years+ 1,186 635 551 17
Slide 19: Key Focus Areas
bee Key Focus Areas (e. Edelweiss Ideas create, values protect
Slide 20: We continue to be focused on…
We continue to be focused on…. 1 Value creation in underlying businesses 2 Reduction in net debt 3 Unbundling and Value Unlock 19
Slide 21: Value creation in underlying businesses
1 Value creation in underlying businesses $ Mn Business Metrics FY20 FY24 Growth AUM 2,600 6,555 2.5x Alternative Asset Mgt. FPAUM 1,318 3,858 2.9x AUM 3,355 15,218 4.5x Mutual Fund Equity AUM 779 5,236 6.7x Asset Reconstruction Cum. Recoveries 2,708 6,219 - GWP 19 102 5.3x General Insurance AUM 37
Slide 22: Reduction in net debt
2 Reduction in net debt $ Mn 67% 4,793 2,277 1,960 1,569 Mar 19 Mar 21 Mar 23 Mar 24 Reduced by ~$3,225 Mn in last 5 years 21
Slide 23: Unbundling and Value Unlock
3 Unbundling and Value Unlock Unbundling – Seven high quality, self-sufficient businesses with strong independent boards Businesses have independent management teams and robust operating platforms Value Unlock Unlocked value for shareholders in Nuvama last year – a win-win-win for all stakeholders •
Slide 24: Important Updates
Important Updates 1. Regulatory Update 2. EAAA Value Unlock
Slide 25: Regulatory Update
1 Regulatory Update Two of our underlying subsidiaries, EARC and ECLF, received orders from RBI on 29th May Respective boards and management teams are working to address the issues raised by the regulator EFSL is keeping an oversight on the developments and will provide regular updates 24
Slide 26: EARC – RBI Order
1 EARC – RBI Order Restriction on acquisition of financial assets including SRs and reorganisation of existing SRs into senior Order and subordinate tranches • Remedial plan submitted with implementation timelines Current • EARC board closely monitoring the execution plan Status • Recoveries continu
Slide 27: ECLF – RBI Order
1 ECLF – RBI Order Order Restriction on undertaking any structured transactions in wholesale exposures • Remedial plan submitted with implementation timelines • ECLF board closely monitoring the execution plan Current • Wholesale business was discontinued, effective 1st Jan 2024 Status • Wholesale b
Slide 28: EAAA value unlock
2 EAAA value unlock Process initiated upon significant inbound investor interest Plan a stake sale of 10-20%; expect to raise $180-240 Mn The stake sale will enable debt reduction and establish the market value of the business Process Update • Finalization of investment banker and information
Slide 29: Business Performance
bee Business Performance (e. Edelweiss Ideas create, values protect
Slide 30: Alternative Asset Mgt: Business performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Business performance snapshot Key Metrics for the quarter Business Update • AUM grew by 17% YoY to $6,752 Mn AUM ($ Mn) 6,752 • Fee Paying AUM at $3,876 Mn, up 32% YoY Fee Paying AUM • Real Assets strategy acquired assets of around $960 Mn of 3,876 value
Slide 31: Alternative Asset Mgt: Financial performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Financial performance snapshot $ Mn Quarter ended Quarter ended Jun 24 Jun 23 AUM 6,752 5,788 Fee Paying AUM 3,876 2,948 Equity 95 71 Net Revenue 21 15 Opex 11 9 Profit After Tax 8 5 30
Slide 32: Alternative assets overview
Alternative Asset Mgt Alternative assets overview AUM – Strategy wise Fee Paying AUM – Strategy wise AUM – Geography wise 29% 44% $6,752 Mn 48% $3,876 Mn $6,752 Mn 52% 56% 71% Credit Real Assets Credit Real Assets Offshore Domestic 31
Slide 33: Mutual Fund: Business performance snapshot
Mutual Fund Mutual Fund: Business performance snapshot Key Metrics for the quarter Business Update • AUM grew by 24% YoY to $16,297 Mn; market share of AUM ($ Mn) 16,297 2.23% as on Jun 24 • Equity AUM at $6,291 Mn, up 71% YoY Equity AUM • Total net inflows of $623 Mn in the quarter 6,291 ($ Mn) o $
Slide 34: Mutual Fund: Financial performance snapshot
Mutual Fund Mutual Fund: Financial performance snapshot $ Mn Quarter ended Quarter ended Jun 24 Jun 23 AUM 16,297 13,181 Equity AUM 6,291 3,679 Equity 32 25 Revenue 9 6 Opex 5 5 Profit After Tax 3 1 33
Slide 35: Robust growth in AUM and customer base
Mutual Fund Robust growth in AUM and customer base MF Equity AUM ($ Mn) MF Debt AUM ($ Mn) 6,291 9,263 10,006 6,974 3,679 3,092 Jun 22 Jun 23 Jun 24 Jun 22 Jun 23 Jun 24 SIP Book ($ Mn) Active Folios (# in Lakhs) 17 31 12 19 10 16 Jun 22 Jun 23 Jun 24 Jun 22 Jun 23 Jun 24 Growing SIP book adds to th
Slide 36: Asset Reconstruction: Business performance snapshot
ARC Asset Reconstruction: Business performance snapshot Key Metrics for the quarter Business Update • Recovered $160 Mn, of which 18% was from retail Equity ($ Mn) 388 portfolio AUM ($ Mn) 3,583 • Share of retail assets in capital employed stood at 14% Capital employed 518 • Well matched ALM across
Slide 37: Asset Reconstruction: Financial performance snapshot
ARC Asset Reconstruction: Financial performance snapshot $ Mn Quarter ended Quarter ended Jun 24 Jun 23 AUM 3,583 4,691 Capital Employed 518 568 Wholesale assets 444 482 Retail assets 73 86 Equity 388 345 Gross Revenue 26 28 Opex 3 3 Profit After Tax 10 10 Edelweiss’ share in PAT 6 6 36
Slide 38: NBFC: Business performance snapshot
NBFC NBFC: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 409 • Partnership with Central Bank of India, IDFC First Bank and Standard Chartered Bank continues to deepen AUM ($ Mn) 779 • Disbursed $24 Mn of retail loans, up 24% YoY; 80% under co- lending model
Slide 39: NBFC: Financial performance snapshot
NBFC NBFC: Financial performance snapshot $ Mn Quarter ended Quarter ended Jun 24 Jun 23 AUM 779 893 Gross Loan Book 246 422 Gross Revenue 21 45 Net Revenue (2) 14 Opex 11 8 Credit Cost (18) (0) Profit After Tax 3 4 GNPA 2.06% 2.80% NNPA 0.95% 1.77% 38
Slide 40: Wholesale reduction on track
NBFC Wholesale reduction on track ECLF wholesale loan assets ($ Mn) 60% 1,154 473 150 Jun 22 Jun 24 Jun 26E Reduction will continue in the normal course of business 39
Slide 41: Housing Finance: Business performance snapshot
Housing Finance Housing Finance: Business performance snapshot Key Metrics for the quarter Business Update • Partnership with State Bank of India continues to deepen Equity ($ Mn) 97 with ongoing disbursals • Disbursed $38 Mn, up 80% YoY; 25% under co-lending model AUM ($ Mn) 486 • Asset quality con
Slide 42: Housing Finance: Financial performance snapshot
Housing Finance Housing Finance: Financial performance snapshot $ Mn Quarter ended Quarter ended Jun 24 Jun 23 AUM 486 479 Gross Loan Book 387 357 Gross Revenue 15 13 Net Revenue 5 4 Opex 5 4 Credit Cost 0 (0) Profit After Tax 0 0 GNPA 2.09% 1.93% NNPA 1.48% 1.47% 41
Slide 43: General Insurance: Business performance snapshot
General Insurance General Insurance: Business performance snapshot Key Metrics for the quarter Business Update • One of the fastest growing player with gross direct Equity ($ Mn) 33 premium income (GDPI) growth of 56% YoY • Gross written premium (GWP) of $28 Mn, up 56% YoY GWP ($ Mn) 28 • Motor segm
Slide 44: General Insurance: Financial performance snapshot
General Insurance General Insurance: Financial performance snapshot $ Mn Quarter ended Quarter ended Jun 24 Jun 23 Gross Written Premium 28 18 Net Premium Income 17 11 Investment Income & Other 8 5 Income Total Income 24 16 Policy benefits & insurance policy 14 9 liability Other expenses 12 11 Profi
Slide 45: Life Insurance: Business performance snapshot
Life Insurance Life Insurance: Business performance snapshot Key Metrics for the quarter Business Update • Gross premium of $33 Mn, up 10% YoY Equity ($ Mn) 92 • AUM at $1,000 Mn, up 21% YoY Individual APE ($ Mn) 9 • Traditional Par and Non-Par products constitute 74% of product mix #Policies Issued
Slide 46: Life Insurance: Financial performance snapshot
Life Insurance Life Insurance: Financial performance snapshot $ Mn Quarter ended Quarter ended Jun 24 Jun 23 Gross Premium 33 30 Net Premium Income 32 29 Investment Income & Other 46 39 Income Total Income 77 68 Policy benefits & insurance policy 63 54 liability Other expenses 20 17 Profit After Tax
Slide 47: Governance & Corporate Responsibility
Governance & Corporate Responsibility
Slide 48: 7 Member Board with 4 Independent Directors
7 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 49: Significant institutional ownership
Significant institutional ownership Shareholding Pattern as on Jun 30, 2024 Key Shareholders Percent 1 TIAA CREF Funds 7.2% Employee Trust 2 CLSA Global Markets 5.8% DIIs, Non 4.8% Promoter Group Institutions 3 LIC 2.6% & Others 32.8% 4 Vanguard Group 2.4% 30.6% 5 1729 Capital & Advisors 1.8% 6 Flow
Slide 50: Our contribution to building a more sustainable tomorrow
Our contribution to building a more sustainable tomorrow Under the leadership of EdelGive Foundation, we have… $163 Mn mobilized through Partnered with over 277 Assisted over 60% of EdelGive’s Ensured long term commitments high caliber NGOs NGO partners to grow at a CAGR association with average ran
Slide 51: Our investment in communities
Our investment in communities EdelGive Foundation’s commitment to investing in communities 80 Districts Sustainable Women across 13 States Quality Education Livelihoods Empowerment 20 lakh children impacted 2.52 lakh Individuals trained 2.53 lakh women supported 31,000 schools reached 1,911 watershe
Slide 52: Trusted partner: EdelGive funding partners & networks
Trusted partner: EdelGive funding partners & networks Foundations, Corporates and HNIs partner with Edelgive Platform for their philanthropic allocation 51
Slide 53: 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 54: Safe Harbour
Safe Harbour Slide 4: Net worth includes MI, Ex-Insurance PAT is post MI Slide 4,7,8: Ex-Insurance PAT is post-MI; Business PATs are pre-MI Slide 4,6,15,21: Debt includes accrued interest and excludes CBLO and securitisation liabilities Slide 6,12: Customer reach includes individuals covered under G
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