Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q3 FY2024 Earnings Presentation
45 slides from Edelweiss Financial Services's earnings presentation, Feb 12, 2024
Slide 1: Exchange filing cover letter for earnings update
EW/Sec/2023-24/271 February 12, 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 enclos
Slide 2: Earnings update – Quarter ended Dec 23
US $ version Edelweiss Financial Services Limited Earnings update – Quarter ended Dec 23
Slide 3: Contents
Contents 1 Overview for quarter ended Dec 23 3 2 Performance highlights 6 3 Business performance 19 4 Governance & corporate responsibility 37 Please refer to the detailed business update filed for Alternative Asset Management business 2
Slide 4: Overview
Overview Quarter ended Dec 23
Slide 5: Edelweiss at a glance – Quarter ended Dec 23
Edelweiss at a glance – Quarter ended Dec 23 Net Worth Ex-Insurance PAT BVPS $727 Mn $22 Mn $0.5 (FV $0.1) Net Debt Liquidity as a % of Debt $1,645 Mn 18% 4
Slide 6: Diversified with seven high-quality businesses
Diversified with seven high-quality businesses Edelweiss Financial Services Ltd (EFSL) Alternative Asset Housing General Mutual Fund NBFC Life Insurance Asset Mgt Reconstruction Finance Insurance Edelweiss Edelweiss Edelweiss Asset ECL Finance Nido Home Zuno General Edelweiss Alternate Asset Reconst
Slide 7: Performance Highlights
Performance Highlights oO Edelweiss Ideas create, values protect
Slide 8: Performance highlights – quarter ended Dec 23
Performance highlights – quarter ended Dec 23 1 Healthy Profitability with an upward trend in key business metrices Ex-Insurance PAT grew by 12% YoY Alternative Asset Management Fee Paying AUM 22% YoY; MF Equity AUM 47% YoY GI Gross Written Premium 70% YoY; LI Gross Premium 12% YoY Retail credit dis
Slide 9: Healthy growth in profitability across businesses
1 Healthy growth in profitability across businesses PAT for nine month ended $ Mn EFSL Alternative Asset Asset Mutual Fund ex-Insurance Management Reconstruction 54 16 31 48 14 4 27 2 Dec 22 Dec 23 Dec 22 Dec 23 Dec 22 Dec 23 Dec 22 Dec 23 12% YoY 18% YoY 83% YoY 14% YoY 8
Slide 10: Earnings distribution across businesses
1 Earnings distribution across businesses $ Mn Quarter Ended Nine Month Ended Business Dec 23 Dec 22 Dec 23 Dec 22 Alternative Asset Management 5 7 16 14 Mutual Fund 1 1 4 2 Asset Reconstruction 11 10 31 27 NBFC 4 4 13 12 Housing Finance 0 0 1 2 General Insurance (3) (3) (11) (12) Life Insurance (6)
Slide 11: Upward trend in key business metrices (1/2)
1 Upward trend in key business metrices (1/2) Alternative Asset Management AUM at $6,268 Mn; Fee paying AUM at $3,549 Mn; up 16% YoY up 22% YoY Mutual Fund AUM at $14,799 Mn; Equity AUM at $4,813 Mn; up 23% YoY up 47% YoY Asset Reconstruction Acquired debt assets of $230 Mn, Share of retail assets i
Slide 12: Upward trend in key business metrices (2/2)
1 Upward trend in key business metrices (2/2) General Insurance Gross written premium of Issued ~1.25 lakh new policies $31 Mn; up 70% YoY in the quarter; up 12% YoY Life Insurance Claim settlement ratio at 98%; Gross premium of $51 Mn; 13m persistency improved YoY to up 12% YoY 77% from 74% NBFC Di
Slide 13: Customer assets grew by 17% YoY
2 Customer assets grew by 17% YoY in $ Mn Customer Alternative Asset Mgt Mutual Fund Assets AUM AUM 25,579 6,268 14,799 21,837 5,414 12,031 Dec 22 Dec 23 Dec 22 Dec 23 Dec 22 Dec 23 17% YoY 16% YoY 23% YoY 12
Slide 14: Coupled with strong scale up in customer reach
2 Coupled with strong scale up in customer reach in Lakhs Customer Mutual Fund General Insurance Reach Folios Customers 47 67 13.8 50 31 11.3 Dec 22 Dec 23 Dec 22 Dec 23 Dec 22 Dec 23 33% YoY 22% YoY 50% YoY 13
Slide 15: Driven by innovative product launches
2 Driven by innovative product launches Mutual Fund • Edelweiss Multi Asset Allocation Fund • Edelweiss Multi Cap Fund • Edelweiss Gold ETF • Edelweiss Silver ETF General Insurance • Zuno Driving Quotient • Zuno HealthPlus Policy Life Insurance • Edelweiss Tokio Life Zindagi Protect • Edelweiss Toki
Slide 16: Strong balance sheet with well capitalised businesses
3 Strong balance sheet with well capitalised businesses Businesses Metric Value NBFC Capital Adequacy 39.8% Housing Finance Capital Adequacy 34.8% Asset Reconstruction Capital Adequacy 56.1% Life Insurance Solvency Ratio 187% General Insurance Solvency Ratio 176% 15
Slide 17: Reduced $403 Mn of Debt YoY
3 Reduced $403 Mn of Debt YoY Net Debt ($ Mn) $ Mn Business Dec 23 NBFC 731 2,048 Housing Finance 197 1,645 Alternative Asset Management 52 Asset Reconstruction 294 Corporate 995 Gross Debt 2,269 (Less) Liquidity 416 (Less) Liquid Investment* 208 Net Debt 1,645 Dec 22 Dec 23 16 * Liquid Investment p
Slide 18: Cash flow plan
3 Cash flow plan $ Mn Jan 24 to Dec 24 Opening Available Liquidity (A) 409 Inflows Expected Inflows 914 Fresh borrowings 253 Total Inflows (B) 1,167 Outflows Repayments 794 Disbursements 433 Total Outflows (C) 1,227 Closing Available Liquidity (A+B-C) 349 17
Slide 19: 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 1,636 1,444 193 1-3 years 1,203 1,143 60 3 years+ 1,287 854 433 18
Slide 20: Business Performance
Business Performance oO Edelweiss Ideas create, values protect
Slide 21: Alternative Asset Mgt: Business performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Business performance snapshot Key Metrics for the quarter Business Update AUM ($ Mn) 6,268 • AUM at $6,268 Mn, up 16% YoY • Fee Paying AUM at $3,549 Mn, up 22% YoY Fee Paying AUM • Infrastructure Yield Plus (IYP) II have raised ~$963 Mn till 3,549 ($ Mn)
Slide 22: Alternative Asset Mgt: Financial performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Financial performance snapshot $ Mn Dec 23 Dec 22 AUM 6,268 5,414 Fee Paying AUM 3,549 2,900 Equity 84 41 Net Revenue 16 14 Opex 10 6 Profit After Tax 5 7 21
Slide 23: Alternative assets overview
Alternative Asset Mgt Alternative assets overview AUM – Strategy wise Fee Paying AUM – Strategy wise AUM – Investor type 25% 40% $6,268 Mn 48% $3,549 Mn $6,268 Mn 52% 60% 75% Credit Real Assets Credit Real Assets Institutional Non Institutional 22
Slide 24: Mutual Fund: Business performance snapshot
Mutual Fund Mutual Fund: Business performance snapshot Key Metrics for the quarter Business Update • AUM grew by 23% YoY to $14,799 Mn; market share of AUM ($ Mn) 14,799 2.39% as on Dec 23 • Equity AUM at $4,813 Mn, up 47% YoY Equity AUM • Net inflows of $638 Mn during the quarter with a market 4,81
Slide 25: Mutual Fund: Financial performance snapshot
Mutual Fund Mutual Fund: Financial performance snapshot $ Mn Dec 23 Dec 22 AUM 14,799 12,031 Equity AUM 4,813 3,273 Equity 28 24 Net Revenue 6 5 Opex 5 4 Profit After Tax 1 1 24
Slide 26: Consistent growth in AUM and customer base
Mutual Fund Consistent growth in AUM and customer base MF Equity AUM ($ Mn) MF Debt AUM ($ Mn) 9,806 4,813 8,530 3,273 6,256 3,080 Dec 21 Dec 22 Dec 23 Dec 21 Dec 22 Dec 23 SIP Book ($ Mn) Active Folios (# in Lakhs) 13.8 24 11.3 18 9.2 15 Dec 21 Dec 22 Dec 23 Dec 21 Dec 22 Dec 23 Growing SIP book ad
Slide 27: Asset Reconstruction: Business performance snapshot
ARC Asset Reconstruction: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 367 • Recoveries of $247 Mn for the quarter, of which 11.7% was from retail portfolio AUM ($ Mn) 4,512 • Acquired debt assets of $230 Mn during the quarter, of which ~40% were retail ass
Slide 28: Asset Reconstruction: Financial performance snapshot
ARC Asset Reconstruction: Financial performance snapshot $ Mn Dec 23 Dec 22 AUM 4,512 4,391 Capital Employed 561 602 Wholesale assets 476 518 Retail assets 85 84 Equity 367 325 Gross Revenue 34 32 Opex 3 3 Profit After Tax 11 10 Edelweiss’ share in PAT 7 6 27
Slide 29: NBFC: Business performance snapshot
NBFC NBFC: Business performance snapshot Key Metrics for the quarter Business Update • Improved traction in co-lending disbursal with Central Bank Equity ($ Mn) 441 of India, IDFC First Bank and Standard Chartered Bank o ~80% of disbursal during the quarter under co-lending AUM ($ Mn) 836 model • Si
Slide 30: NBFC: Financial performance snapshot
NBFC NBFC: Financial performance snapshot $ Mn Dec 23 Dec 22 AUM 836 1,250 Gross Loan Book 278 679 Gross Revenue 35 63 Net Revenue 9 31 Opex 10 14 Credit Cost (6) 12 Profit After Tax 4 4 GNPA 2.69% 2.97% NNPA 1.68% 1.91% 29
Slide 31: Wholesale reduction on track
NBFC Wholesale reduction on track ECLF wholesale loan assets ($ Mn) 65% 1,414 499 199 Dec 21 Dec 23 Dec 25E Expect momentum to continue with planned reduction 30
Slide 32: Housing Finance: Business performance snapshot
Housing Finance Housing Finance: Business performance snapshot Key Metrics for the quarter Business Update • Disbursed $36 Mn in the quarter, of which 32% under co- Equity ($ Mn) 97 lending model • Partnership with Standard Chartered Bank and State Bank AUM ($ Mn) 458 of India continues to deepen wi
Slide 33: Housing Finance: Financial performance snapshot
Housing Finance Housing Finance: Financial performance snapshot $ Mn Dec 23 Dec 22 AUM 458 500 Gross Loan Book 355 369 Gross Revenue 14 13 Net Revenue 5 4 Opex 4 4 Credit Cost 0 0 Profit After Tax 0 0 GNPA 2.24% 2.45% NNPA 1.61% 1.92% 32
Slide 34: General Insurance: Business performance snapshot
General Insurance General Insurance: Business performance snapshot Key Metrics for the quarter Business Update • Gross direct premium income (GDPI) growth of 73% YoY Equity ($ Mn) 26 for the quarter • Motor segment reported a robust 47% YoY growth in GDPI against industry growth of 10% GWP ($ Mn) 31
Slide 35: General Insurance: Financial performance snapshot
General Insurance General Insurance: Financial performance snapshot $ Mn Dec 23 Dec 22 Net Premium Income 12 10 Investment Income & Other 7 3 Income Total Income 19 13 Policy benefits & insurance policy 8 10 liability Other expenses 12 8 Profit After Tax (3) (3) 34
Slide 36: Life Insurance: Business performance snapshot
Life Insurance Life Insurance: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 67 • Gross premium of $51 Mn, up 12% YoY • AUM at $907 Mn, up 19% YoY Individual APE ($ Mn) 13 • Traditional Par and Non-Par products constitute ~80% of product mix #Policies Issued
Slide 37: Life Insurance: Financial performance snapshot
Life Insurance Life Insurance: Financial performance snapshot $ Mn Dec 23 Dec 22 Net Premium Income 50 44 Investment Income & Other 36 19 Income Total Income 85 64 Policy benefits & insurance policy 67 50 liability Other expenses 24 20 Profit After Tax (6) (6) Edelweiss’ share in PAT (5) (5) 36
Slide 38: Governance & Corporate Responsibility
Governance & Corporate Responsibility
Slide 39: 6 Member Board with 3 Independent Directors
6 Member Board with 3 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 40: Significant institutional ownership
Significant institutional ownership Above 1% Shareholding Pattern as on Dec 31, 2023 Key Shareholders Percent 1 Pabrai Investment Funds 8.5% Employee Trust 2 TIAA CREF funds 4.2% DIIs, Non 4.8% Promoter Group 3 LIC 2.6% Institutions & Others 4 Vanguard Group 2.4% 32.8% 30.0% 5 Baron Asset Management
Slide 41: Our contribution to building a more sustainable tomorrow
Our contribution to building a more sustainable tomorrow Under the leadership of EdelGive Foundation, we have… Over ~$106 Mn mobilized Partnered with over 174 Assisted over 60% of EdelGive’s Ensured long term through commitments high caliber NGOs NGO partners to grow at a CAGR association with avera
Slide 42: Our investment in communities
Our investment in communities EdelGive Foundation’s commitment to investing in communities 85 Districts Sustainable Women across 12 States Quality Education Livelihoods Empowerment 20 lakh children impacted 2.48 lakh Individuals trained 2.44 lakh women supported 31,000 schools reached 1,832 watershe
Slide 43: Trusted partner: EdelGive funding partners & networks
Trusted partner: EdelGive funding partners & networks Foundations, Corporates and HNIs partner with Edelgive Platform for their philanthropic allocation 42
Slide 44: 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 45: Safe Harbour
Safe Harbour Slide 4: Net worth includes MI, investment in CCD by CDPQ of $42 Mn, Ex-Insurance PAT is post MI Slide 4,7,8,9: Ex-Insurance PAT is post-MI; Business PATs are pre-MI Slide 4,7,16: Debt includes accrued interest, liabilities on market linked debentures and excludes CBLO, CDPQ CCD and sec
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