Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Q4 FY18 Earnings Presentation
43 slides from Manappuram Finance's earnings presentation, May 2018
Slide 1: Manappuram Finance Limited Investor Presentation May 2018
Manappuram Finance Limited Investor Presentation May 2018 Gold Loans Microfinance Housing Finance Vehicle Finance
Slide 2: Quarterly Update
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 3: Q4 FY18 Results: Consolidated Result Highlights
Q4 FY18 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS AUM Net Profit Networth ROA 4.4% Rs 157,648 Mn Rs 1,821.7 Mn Rs 38,363 Mn ROE 19.3% (+ 7.6% QoQ) (5.1 % QoQ) Capital Adequacy * Borrowing Cost * GNPA * BV / Share Rs 45.53 27.0% 8.7% 0.7% EPS Rs 7.97 Share of New Dividend / Share Total Branches No of L
Slide 4: Consolidated Profit & Loss Statement
Q4 FY18 RESULTS: CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (Rs Mn) FY18 FY17 YOY Q4 FY18 Q4 FY17 YOY % Q3 FY18 QOQ % Closing AUM (Rs Bn) 158 137 15.4% 158 137 15.4% 147 7.6% Income from Operations 34,233.6 33,876.9 1.1% 8,898.0 8,988.0 -1.0% 8,728.2 1.9% Finance expenses 10,276.6 11,687.1 -12
Slide 5: Consolidated Balance Sheet
Q4 FY18 RESULTS: CONSOLIDATED BALANCE SHEET Particulars (Rs Mn) Mar 2018 Mar 2017 YOY % Dec 2017 QOQ % Cash & Bank Balances 7,107.0 5,226.9 36.0% 5,618.4 26.5% Investments 50.5 50.5 0.0% 50.5 0.0% Loans & Advances 155,805.1 138,416.7 12.6% 146,026.3 6.7% Fixed Assets 2,745.8 1,869.5 46.9% 1,726.6 59
Slide 6: Consolidated Result Highlights
Q4 FY18 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS CONSOLIDATED AUM (Rs Bn) NET PROFIT (Rs Mn) CAGR: 13.2 % 158 158 CAGR: 25.4 % 137 137 147 134 7,559 114 6,709 96 3,534 2,713 1,552 1,604 1,733 1,822 FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY18 FY18 FY18 FY18 FY18 FY18 FY18 FY18
Slide 7: Consolidated Result Highlights
Q4 FY18 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS NETWORTH (Rs Mn) BOOK VALUE PER SHARE (Rs) 38,363 34,658 35,748 36,989 38,363 33,618 45.5 42.5 43.9 45.5 26,328 27,580 39.9 41.2 31.3 32.8 FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY18 FY18 FY18 FY18 FY18 FY18 FY18 FY18 EARNINGS
Slide 8: Consolidated AUM Update
Q4 FY18 RESULTS: CONSOLIDATED AUM UPDATE CONSOLIDATED AUM (Rs Mn) Particulars (Rs Mn) FY15 FY16 FY17 FY18 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Gold Loans 92,244.8 100,806.0 111,245.3 117,349.8 107,273.1 107,609.1 113,270.8 117,349.8 Microfinance 3,220.0 9,988.0 17,959.4 24,372.0 18,271.2 19,645.8 21,116.5 24
Slide 9: Manappuram Finance: Borrowing Profile
Q4 FY18 RESULTS: MANAPPURAM FINANCE: BORROWING PROFILE BORROWING AS ON Mar, 2018 = Rs 102,406 Mn CREDIT RATING Manappuram Finance: Commercial Paper Long Term: AA- (Stable) by CRISIL, ICRA 28.3% Long Term: AA (Stable) by Bricwork, CARE Short Term: A1+ by CARE Commercial Paper : A1+ by CRISIL,CARE Sub
Slide 10: Manappuram Finance: Result Analysis
Q4 FY18 RESULTS: MANAPPURAM FINANCE: RESULT ANALYSIS GOLD LOAN AUM (Rs Bn) GOLD LOAN DISBURSEMENTS (Rs Bn) 622 CAGR: 6.2 % 525 111 117 108 113 117 101 107 361 92 245 205 127 128 162 FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY18 FY18 FY18 FY18 FY18 FY18 FY18 FY18 OPEX TO AUM %
Slide 11: Manappuram Finance: Result Analysis
Q4 FY18 RESULTS: MANAPPURAM FINANCE: RESULT ANALYSIS NETWORTH (Rs Mn) NPA ANALYSIS % * 38,145 34,474 35,662 36,897 38,145 33,108 26,274 27,368 2.0% 1.2% 1.0% 1.1% 1.2% 0.7% 0.7% 0.7% 1.7% 1.0% 0.9% 0.9% 0.7% 0.3% 0.4% 0.3% FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY18 FY18 FY1
Slide 12: Manappuram Finance: Gold AUM Update
Q4 FY18 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE PAN INDIA PRESENCE GOLD AUM - REGIONWISE BREAKUP Jammu & Kashmir, 10 Himachal Pradesh, 6 10% Chandigarh, 4 Delhi, 59 17% 60% Uttarakhand, 5 Punjab, 75 Uttar Pradesh, 120 13% Haryana, 62 Assam, 17 Bihar, 19 Rajasthan, 79 Tripura, 2 South North West
Slide 13: Manappuram Finance: Gold AUM Update
Q4 FY18 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE GOLD HOLDING (TONNES) GOLD AUM PER BRANCH (Rs Mn) 61.1 64.0 62.3 64.0 59.6 59.4 59.8 33.8 35.3 34.1 35.3 53.1 30.6 32.6 32.6 28.0 FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY18 FY18 FY18 FY18 FY18 FY18 FY18 FY18 CUSTOMER BASE
Slide 14: Asirvad Microfinance: Key Highlights
Q4 FY18 RESULTS: ASIRVAD MICROFINANCE: KEY HIGHLIGHTS Particulars (Rs Mn) FY18 FY17 YOY% Q4 FY18 Q4 FY17 YOY % Q3 FY18 QOQ % Closing AUM 24,372.0 17,959.4 35.7% 24,372.0 17,959.4 35.7% 21,116.5 15.4% Income from Operations 4,372.6 3,428.2 27.5% 1,217.1 970.8 25.4% 1,159.0 5.0% Finance expenses 2,138
Slide 15: Asirvad Microfinance: Result Analysis
Q4 FY18 RESULTS: ASIRVAD MICROFINANCE: RESULT ANALYSIS AUM (Rs Mn) RETURN RATIOS % 18.6% 24,372 24,372 14.6% 14.1% 13.9% CAGR: 65.8 % 21,117 17,959 18,271 19,646 3.6% 3.4% -1.4% -6.9% -2.2% 0.1% 2.5% 0.6% 2.2% 9,988 -11.7% -20.6% 3,220 -55.3% FY15 FY16 FY17 FY18 Q1 Q2 Q3 Q4 FY15 FY16 FY17 FY18 Q1 Q2
Slide 16: Asirvad Microfinance: AUM Update
Q4 FY18 RESULTS: ASIRVAD MICROFINANCE: AUM UPDATE PAN INDIA PRESENCE MFI AUM - REGIONWISE BREAKUP Uttarakhand, 5 27% Chandigarh, 1 49% Uttar Pradesh, 63 Punjab, 21 12% Bihar, 64 Assam, 1 11% Haryana, 28 West Bengal, 89 Rajasthan, 35 South North West East Jharkhand, 43 Gujarat, 4 Tripura, 11 Madhya C
Slide 17: Housing Finance: Business Update
Q4 FY18 RESULTS: HOUSING FINANCE: BUSINESS UPDATE AFFORDABLE HOUSING HOUSING FINANCE METRICS AUM (Rs Mn) – Mar 2018 3,747 ▪ Started commercial operations in January 2015. Branch Network 35 ▪ Focus on Affordable Housing for Mid to Low income Group. Number of States 6 ▪ Focus on South and West of Indi
Slide 18: Vehicle Finance: Business Update
Q4 FY18 RESULTS: VEHICLE FINANCE: BUSINESS UPDATE VEHICLE FINANCE VEHICLE FINANCE METRICS ▪ Started commercial operations in January 2015. AUM (Rs Mn) – Mar 2018 6,254 ▪ The operations are a part of Manappuram Finance Ltd and are Branch Network 76 carried out from existing gold loan branches Number
Slide 19: Company Overview
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 20: Company Overview: Brief Profile
COMPANY OVERVIEW: BRIEF PROFILE STRONG ▪ Incorporated in 1992, the company has been one of India’s leading gold loans NBFCs. PEDIGREE ▪ Promoted by Mr. V.P. Nandakumar (current MD & CEO) whose family has been involved in gold loans since 1949. ▪ Focus on utilising surplus capital to build or acquire
Slide 21: Company Overview: Strong Brand Recall
COMPANY OVERVIEW: STRONG BRAND RECALL ▪ Strong brand equity built over the years. ▪ Celebrity endorsements have led to enhanced visibility and growing business. ▪ Brand ‘Manappuram’ is endorsed by well recognized film industry icons across India . ▪ Our brand ambassadors - Venkatesh, Mohan Lal, Pune
Slide 22: Company Overview: Experienced Management Team
COMPANY OVERVIEW: EXPERIENCED MANAGEMENT TEAM Mr. V. P. Nandakumar Mr. B.N. Raveendra Babu Mr. Kapil Krishan Managing Director & CEO Executive Director Group Chief Financial Officer ▪ 27 years experience with ▪ Chief Promoter of ▪ Director since July 1992 organizations such as Manappuram Group ▪ Wor
Slide 23: Corporate Governance – Strong Board of Directors
COMPANY OVERVIEW: CORPORATE GOVERNANCE – STRONG BOARD OF DIRECTORS Mr. Jagdish Capoor • Former Chairman of HDFC Bank, former Deputy Governor of Reserve Bank of India, former Chairman of UTI and BSE Ltd CHAIRMAN, INDEPENDENT & • Currently, he is on the Board of Indian Hotels Company Limited, Assets C
Slide 24: Corporate Governance – Strong Board of Directors
COMPANY OVERVIEW: CORPORATE GOVERNANCE – STRONG BOARD OF DIRECTORS Mr. Rajiven V. R. • He holds a Bachelor of Science degree and has completed his LLB from Govt. Law College, Trivandrum INDEPENDENT & • Shri Rajiven brings to the Board a wealth of experience in areas like Leadership and Staff managem
Slide 25: Company Overview: Shareholding Structure
COMPANY OVERVIEW: SHAREHOLDING STRUCTURE Share Price Performance MARKET DATA AS ON 17.05.2018 140 97,397.1 Market Capitalization (Rs Mn) 120 Price (Rs) 115.6 100 No. of Shares Outstanding (Mn) 842.5 80 Face Value (Rs) 2.0 60 Avg. Trading Volume (Rs Mn) 702 40 Avg. Trading Volume (Mn shares) 6.7 20 5
Slide 26: Business Strategy
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 27: Business Strategy: Key Highlights
BUSINESS STRATEGY: KEY HIGHLIGHTS BUSINESS STRATEGY STRENGTHEN THE ADDITION OF SYNERGISTIC CORE GOLD LOAN BUSINESS NEW BUSINESS SEGMENTS • De-Linking the Gold Business • Leveraging the Strong Brand Equity & Existing from Gold Prices Retail Customer Base • Focus on Branch Activations through increase
Slide 28: De-Linking Gold Business from Gold Prices
BUSINESS STRATEGY: DE-LINKING GOLD BUSINESS FROM GOLD PRICES Earlier Scenario – Additional 2 month for 12 months – Single Product Offering 12 month Long Tenure Product Auction Gold value 100 LTV 75% If the Customer does not Gold Loan 75 pay or close the Loan, then there is likely loss of Interest Ra
Slide 29: Gold Loan Business – Reaching Out to the Customer
BUSINESS STRATEGY: GOLD LOAN BUSINESS – REACHING OUT TO THE CUSTOMER Increased Significantly Initiative to track marketing enhanced our Increased branch level initiatives across marketing spend incentives and performance branches and key with growing BTL branch activations scorecard markets and ATL
Slide 30: Introducing New Synergistic Product Segments
BUSINESS STRATEGY: INTRODUCING NEW SYNERGISTIC PRODUCT SEGMENTS STRONG BRAND EQUITY CAPITAL AVAILABILITY ADDITION ON NEW SYNERGISTIC EXISTING RETAIL CUSTOMER PRODUCT SEGMENTS ▪ Current Capital Adequacy at 27 BASE % compared to the minimum 15% as stipulated by the RBI. PAN INDIA DISTRIBUTION MICROFIN
Slide 31: Key Technology Initiatives
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 32: Key Technology Initiatives: Exploring Fintech Opportunities
KEY TECHNOLOGY INITIATIVES: EXPLORING NEW AGE GOLD LOAN BASED FINTECH BUSINESS OPPORTUNITIES INNOVATE (STRATEGIC) Out of the box innovative projects to make us ready and relevant to face future challenges / changes. E.g. - OGL,SGL, Mobility platforms, OGL Credit eWallet, Net Lockers etc. DIFFERENTIA
Slide 33: Gold Loans - IT/Fintech Business Strategy
KEY TECHNOLOGY INITIATIVES: EXPLORING NEW AGE GOLD LOAN BASED FINTECH BUSINESS OPPORTUNITIES GOLD LOANS - IT/FINTECH BUSINESS STRATEGY B2C Self Service Platforms: WEB APPLICATION • Online gold Loan and e-commerce based credit ecosystem, and SGL (SMS based Gold Loan) facility for customers who find i
Slide 34: Technological Innovations to Enhance Value Proposition
KEY TECHNOLOGY INITIATIVES: TECHOLOGICAL INNOVATIONS TO ENHANCE VALUE PROPOSITION CENTRALIZED IOT BASED KEYLESS ELOCKERS TIE-UP WITH E-COMMERCE PLATFORMS FOCUS ON BRAND POSITIONING, IMPROVED COLLECTION, EFFECTIVE LEAD GENERATION, SUPERIOR CUSTOMER EXPERIENCE, OPEX COST REDUCTION 34
Slide 35: Implementation of New Technologies
KEY TECHNOLOGY INITIATIVES: IMPLEMENTATION OF NEW TECHNOLOGIES - STAYING AHEAD OF THE CURVE MAJOR BUSINESS DIFFERENTIATORS COMPLETED RECENTLY TIE-UP WITH PAYTM, M- I-REFER MOBILE AUTOMATIC IMPS / NEFT / BC TIE-UP WITH YES ONLINE INWARD PESA, M-RUPEE, ITZCASH APPLICATION RTGS GOLD LOAN BANK FOR DOMES
Slide 36: Annexure
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 37: Understanding Our Evolution Phase 1: FY08 - FY12
UNDERSTANDING OUR EVOLUTION PHASE 1: FY08 - FY12 STRONG GROWTH WITNESSED…. 2908 3000 ▪ Higher Loan To Value (LTV) up to 85% 150 2064 116 ▪ Lower Cost of Funds due to Eligibility under Priority Sector 2250 100 Lending 75 1500 1005 ▪ Supported by Buoyant Economic Growth 50 645 436 750 ▪ Long Tenure Pr
Slide 38: Understanding Our Evolution Phase 2: FY12 - FY14
UNDERSTANDING OUR EVOLUTION PHASE 2: FY12 - FY14 REGULATORY OVERHANG IMPACT…. Regulatory Changes by RBI- 140 ▪ Mar - 2012 : Removal of Priority Sector Lending Status 120 116 100 – led to Higher Borrowing Cost. 100 75 82 80 60 ▪ Mar - 2012 : Cap on LTV to not exceed more than 60% 40 - 20 0 ▪ Weakened
Slide 39: Understanding Our Evolution Phase 3: FY15 Onwards
UNDERSTANDING OUR EVOLUTION PHASE 3: FY15 ONWARDS ON A REVIVAL PATH….. Sept – 2013 : Regulatory Changes by RBI- 150 ▪ Increased the loan-to-value (LTV) ratio for gold loans to 116 111 75 per cent - 100 92 101 100 82 ▪ Resulting into Level Playing Field for NBFCs vis-a-vis the commercial banks . 50 J
Slide 40: Industry Overview: India Gold Market
INDUSTRY OVERVIEW: INDIA GOLD MARKET India possesses over ~20,000 tonnes of gold worth more than US$ 800 bn. Organized gold loan sector penetration is Just 3% ! ▪ India is the largest consumer of gold jewellery in the world - Together with China, it makes up over half the global consumer demand for
Slide 41: Key Drivers for Gold Loan Market
INDUSTRY OVERVIEW: KEY DRIVERS FOR GOLD LOAN MARKET ADVANTAGE CONSUMER ADVANTAGE LENDER ▪ Idle gold can be monetized for productive purposes. ▪ Collateral / Security is with the lender – No requirement to reposes. ▪ Prompt Disbursement - Faster turnaround time. ▪ No Liquidity Issues – Gold is one of
Slide 42: Competitive Advantage - Gold Loan NBFCs
INDUSTRY OVERVIEW: COMPETITIVE ADVANTAGE - GOLD LOAN NBFC’S Parameter Gold loan NBFC's Banks Moneylenders LTV Up to 75% Lower LTV than NBFC's Higher than 75% Processing charges are much Processing Fees No / Minimal Processing Fees No Processing Fees higher compared to NBFC's Usually in the range of
Slide 43: For Further Queries
FOR FURTHER QUERIES: DISCLAIMER : This presentation and the contents therein are for information purposes only and does not and should not construed to be any investment or legal advice. Any action taken or transaction pursued based on the basis of the information contained Mr. Kapil Krishan herein