Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — FY2021 Earnings Presentation
51 slides from Mahindra & Mahindra Financial Services's earnings presentation, Apr 23, 2021
Slide 1: Cover letter to stock exchanges
Mahindra & Mahindra MahindraFINANCE Financial Services Ltd. Mahindra Towers, 4th Floor, Dr G M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 66526000 Fax: +91 22 24984170 +91 22 24984171 23rd April, 2021 The General Manager-Department of The Manager-Listing Department, Corporate Services, N
Slide 2: FY 2021 Result Update
Mahindra & Mahindra Financial Services Limited FY 2021 Result Update March - 2021 Corporate Office: Regd. Office: Mahindra Towers, 4th Floor, Gateway Building, Apollo Bunder, Dr. G. M. Bhosale Marg, Worli, Mumbai-400 001, India Mumbai-400 018, India Tel: +91 22 2289 5500 Tel: +91 22 6652 6000 Fax:+9
Slide 3: Transforming rural lives across the country
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 2
Slide 4: Company Background
Company Background Parentage: Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 994 billion)* About MMFSL: MMFSL (Mcap: Rs 216 billion)*, one of India’s leading non-banking finance companies focused in the rural and semi-urban sector
Slide 5: MMFSL Group structure
MMFSL Group structure (1) 80% Mahindra Insurance Brokers Limited (“MIBL”) Mahindra & Mahindra Limited 98.43%(2) Mahindra Rural Housing Finance Limited (“MRHFL”) 52.16% 49% Mahindra Finance USA LLC (Joint venture with Rabobank group subsidiary) 51%(3) Mahindra Manulife Investment Management Mahindra
Slide 6: Our Journey
Our Journey Commenced Housing Finance Maiden Retail NCD Issue of Rs. business through MRHFL QIP Issue of Rs. 426 crores 1000 crores Oversubscribed over 7x of base Raised Rs. 414 crores through JV with Rabobank subsidiary for tractor issue size of Rs. 250 crores Rights Issue of Rs. Private Equity fin
Slide 7: Shareholding Pattern (as on March 31, 2021)
Shareholding Pattern (as on March 31, 2021) Shareholding Pattern Top 10 Public Shareholders Life Insurance Corporation Of India 10.62% Government Pension Fund Global HDFC Life Insurance Company Limited 16.77% Wishbone Fund, Ltd. 52.16% Valiant Mauritius Partners Offshore Limited Buena Vi
Slide 8: Transforming rural lives across the country
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 7
Slide 9: Industry Volume
Industry Volume Domestic Sales Q4FY21 Q4FY20 Y-o-Y FY21 FY20 Y-o-Y (Volume in ‘000) (Nos.) (Nos.) Growth (%) (Nos.) (Nos.) Growth (%) Passenger Vehicles (PVs) Passenger Cars / Vans 465 404 15% 1,493 1,695 (12%) UV’s 384 251 53% 1,133 1,078 5% Commercial Vehicles (CVs) M&HCVs 81 49 66% 161 224 (28%)
Slide 10: Automobile Finance Market: 5 years Projected Growth
Automobile Finance Market: 5 years Projected Growth Segment-wise growth in disbursement FY 14 E CAGR FY 20 E FY 21 (P) FY 22 (P) FY 23 (P) CAGR (Rs. Bn.) FY 14 – FY 20 (Rs. Bn.) (Rs. Bn.) (Rs. Bn.) (Rs. Bn.) FY 20 – FY 23 (P) Passenger vehicle 696 8% 1,128 961 1,228 1,365 7% Commercial vehicle 319 9
Slide 11: Housing Finance Growth
Housing Finance Growth Housing Portfolio Size and Market Share Rs. Tn. HFCs Banks Housing credit growth expected to slow down post Covid-19. 25 Housing credit outstanding to grow by 3%-5% in FY21 and 6-8% 22.8 20.5 21.3 20 18.5 in FY22 16.1 15 13.8 A strong YoY uptick in disbursements @ 50%-60%
Slide 12: Transforming rural lives across the country
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 11
Slide 13: Business Strategy
Business Strategy Grow in rural and semi urban markets by providing financing, investment and insurance solutions Expand Branch Network Leverage existing customers base through Direct Marketing Initiatives Diversify Product Portfolio: Nurture new businesses of Digital Finance and Leasing Broad base
Slide 14: Extensive Branch Network
Extensive Branch Network Extensive branch network with presence in 27 states and 7 union territories in India through 1,388 offices Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of Central East North 2 1,388 21 South West 1,284 1,321 1,322 36 27
Slide 15: Diversified Product Portfolio
Diversified Product Portfolio Loans for auto and utility vehicles, tractors, cars, commercial vehicles and construction Vehicle Financing equipments Pre-Owned Vehicles Loans for pre-owned cars, multi-utility vehicles, tractors and commercial vehicles Loans for varied purposes like project fina
Slide 16: Employee Management and Technology Initiatives
Employee Management and Technology Initiatives Employee engagement & training Technology initiatives Foster a Digital Learning ecosystem that drives a culture of All our offices are connected to the centralised data centre in anytime-anywhere learning. Mumbai through Lease line/tablets Structu
Slide 17: Break down of Disbursements
Break down of Disbursements on standalone basis Year ended Year ended Year ended Asset Class March – 21 March – 20 March – 19 Auto/ Utility vehicles 34% 29% 25% Tractors 18% 15% 16% Cars 21% 19% 20% Commercial vehicles and Construction equipments 5% 17% 21% Pre-owned vehicles 12% 16% 12% SME and Oth
Slide 18: Break down of Business Assets
Break down of Business Assets on standalone basis Year ended Year ended Year ended Asset Class March – 21 March – 20 March – 19 Auto/ Utility vehicles 30% 27% 26% Tractors 17% 17% 17% Cars 22% 21% 21% Commercial vehicles and Construction equipments 16% 19% 18% Pre-owned vehicles 9% 10% 9% SME and Ot
Slide 19: Break down by Geography Disbursement
Break down by Geography on standalone basis March 2021 FY 2021 March 2020 FY 2020 10% 12% 15% 17% 10% 15% 11% 15% 19% 20% 26% 27% 20% Disbursement 24% 24% 18% 29% 30% 29% 29% CENTRAL EAST NORTH SOUTH WEST NORTH: Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Rajasthan, Utta
Slide 20: Credit Rating
Credit Rating MMFSL believes that its credit rating and strong brand equity enables it to borrow funds at competitive rates Credit Rating India Ratings Outlook IND AAA Long term and Subordinated debt (incl. MLD); Bank Facilities Stable IND PP-MLD AAA emr Short term debt IND A1+ -- CARE Ratings Outlo
Slide 21: Broad Based Liability Mix
Broad Based Liability Mix on standalone basis All figures in INR crores Funding Mix by Investor Category Funding Mix by type of Instrument Mar’21 Mar’20 Mar’21 Mar’20 Investor Type Instrument Type Amount % Share % Share Amount % Share % Share Banks/ Dev. Institutions 29,646 50.5% 51.4% NCDs 14,911 2
Slide 22: ALM Position and Liability Maturity
ALM Position and Liability Maturity All figures in INR crores 70,000 400% Cumulative Inflow Cumulative Outflow Cumulative Mismatch % 62,910 60,000 350% 54,219 48,711 300% 50,000 43,117 250% 40,000 29,044 200% 30,000 150% 19,296 18,980 20,000 14,151 100% 8,315 10,677 9,749 10,000 6,080 50% 1,771 3,38
Slide 23: Financial Information - Standalone
Company Overview Industry Overview Business Strategy Financial Information - Standalone Key Subsidiaries Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 22
Slide 24: Key Financials
Key Financials on standalone basis Total Income Profit after Tax Disbursement Q4 FY 21 Rs. 2,638 crores Rs. 150 crores Rs. 5,970 crores 1% 32% 15% Q4 FY 20 Rs. 2,676 crores Rs. 221 crores Rs. 7,041 crores FY 21 Rs. 10,517 crores Rs. 335 crores Rs. 19,001 crores 3% 63% 41% FY 20 Rs. 10,245 crores Rs.
Slide 25: Growth Trajectory
Growth Trajectory on standalone basis Loan Book (1) (Rs. crores) Revenues (Rs. crores) 64,993 10,245 10,517 61,250 59,947 8,810 48,547 6,685 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 Pre-Provisioning Operating Profit (Rs. crores) Profit after Tax (2) (Rs. crores) Overlay made during the period 574 cro
Slide 26: Financial Performance
Financial Performance on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) 2.6% 39.8% 2.2% 38.0% 37.3% 28.2% 1.3% 0.4% FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 Return on Net Worth (RONW) (2) (%) Asset Quality (%) Gross NPA Net NPA 15.2% 9.76% 13.3% 8.44% 8.96% 6.65% 6.45% 5
Slide 27: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) Q4FY21 Q3FY21 Q-o-Q Q4FY20 Y-o-Y Revenue from operations (A) 2,600 2,542 2.3% 2,637 -1.4% Less: Finance cost (B) 1,089 1,158 -6.0% 1,290 -15.6% NII (C= A+B) 1,511 1,384 9.2% 1,347 12.2% Other Income (D) 38 33 13.4% 39 -3.6% Total Income (E
Slide 28: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) FY21 FY20 Y-o-Y FY 19 Revenue from operations (A) 10,395 10,098 2.9% 8,723 Less: Finance cost (B) 4,733 4,829 -2.0% 3,945 NII (C= A+B) 5,662 5,269 7.5% 4,778 Other Income (D) 122 147 -17.4% 87 Total Income (E=C+D) 5,784 5,416 6.8% 4,865 Em
Slide 29: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. in crores) As on Mar 31, 2021 As on Mar 31, 2020 As on Mar 31, 2019 ASSETS Financial Asset a) Cash and cash equivalents 571 677 502 b) Bank balance other than (a) above 2,699 749 457 c) Derivative financial instruments 26 93 10 d) Trade Receivables 8 8 5 e)
Slide 30: Standalone Balance Sheet (Contd.)
Standalone Balance Sheet (Contd.) Particulars (Rs. in crores) As on Mar 31, 2021 As on Mar 31, 2020 As on Mar 31, 2019 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 173 40 77 b) Payables i) Trade payables 596 606 979 ii) Other payables 47 30 34 c) Debt Securities 1
Slide 31: Summary & Key Ratios
Summary & Key Ratios on standalone basis Year ended Year ended Year ended Particulars March – 21 March – 20 March – 19 RONW (Avg. Net Worth) ^ 2.5% 8.1% 15.2% Debt / Equity 3.98:1 5.23:1 4.84:1 Capital Adequacy$ 26.0% 19.6% 20.3% Tier I 22.2% 15.4% 15.5% Tier II 3.8% 4.2% 4.8% EPS (Basic) (Rs.)* 3.0
Slide 32: Spread Analysis
Spread Analysis on standalone basis Year ended Year ended Year ended Particulars March – 21 March – 20 March – 19 Total Loan Income / Average Business Assets 14.8% 14.9% 14.7% Total Income / Average Assets 13.9% 14.5% 14.7% Interest / Average Assets 6.2% 6.8% 6.6% Gross Spread 7.7% 7.7% 8.1% Overhea
Slide 33: Collection Efficiency, Moratorium and Restructuring
Collection Efficiency, Moratorium and Restructuring on standalone basis Collection Efficiency^ January February March Quarter 4 FY 2021 94% 98% 109% 100% FY 2020 94% 97% 111% 100% ^ Computed as (Current month demand collected + Overdues collected)/(Current month demand due for the month) FY 20 March
Slide 34: NPA Analysis
NPA Analysis on standalone basis Particulars (Rs. in crores) except figures in % As on Mar 31, 2021 As on Mar 31, 2020 As on Mar 31, 2019 Business Assets (including Provisions) 64,608 68,089 63,122 Gross NPA (Stage 3) 5,786 5,747 4,071 Less: ECL Provisions (Stage 3) 3,352 1,780 780 Net NPA (Stage 3)
Slide 35: Movement of Provisions and Management Overlay
Movement of Provisions and Management Overlay on standalone basis Q4FY21 Year ended March – 21 Rs. in crores ECL Provisions Overlay Total ECL Provisions Overlay Total Stage-1 Provisions (333) - (333) (69) (58) (127) Stage-2 Provisions (314) (17) (331) 161 (42) 119 Stage-3 Provisions (348) 1,269 921
Slide 36: Stage Wise Provisioning
Stage Wise Provisioning on standalone basis Stage-Wise Assets and Provisioning As on 31st Mar 2021 As on 31st Dec 2020 Rs. in crores Business Assets % Provisions % of BA Business Assets % Provisions % of BA Stage - 1 Assets 50,713 78.49% 423 0.8% 50,500 75.91% 755 1.5% Stage - 2 Assets 8,109 12.55%
Slide 37: Financial Information - Consolidated
Company Overview Industry Overview Business Strategy Financial Information - Consolidated Key Subsidiaries Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 36
Slide 38: Key Financials (Consolidated)
Key Financials (Consolidated) on consolidated basis Total Income Profit after Tax Disbursement Q4 FY 21 Rs. 3,038 crores Rs. 219 crores Rs. 6,394 crores 3% 8% 14% Q4 FY 20 Rs. 3,140 crores Rs. 239 crores Rs. 7,452 crores Rs. 12,170 crores Rs. 780 crores Rs. 19,798 crores FY 21 1% % 28% 42% FY 20 Rs.
Slide 39: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) Q4FY21 Q3FY21 Q-o-Q Q4FY20 Y-o-Y Revenue from operations (A) 3,000 29,58 1.4% 3,101 -3.2% Less: Finance cost (B) 1,226 1,312 -6.5% 1,431 -14.3% NII (C= A+B) 1,774 16,46 7.8% 1,670 6.2% Other Income (D) 38 35 8.1% 39 -3.7% Total Income (E
Slide 40: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) FY21 FY20 Y-o-Y FY19 Revenue from operations (A) 12,050 11,883 1.4% 10,372 Less: Finance cost (B) 5,308 5,391 -1.5% 4,432 NII (C= A+B) 6,743 6,492 3.9% 5,940 Other Income (D) 120 114 5.9% 59 Total Income (E=C+D) 6,863 6,606 3.9% 5,999 Em
Slide 41: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. in crores) As on Mar 31, 2021 As on Mar 31, 2020 As on Mar 31, 2019 ASSETS Financial Asset a) Cash and cash equivalents 809 783 537 b) Bank balance other than (a) above 3,174 749 457 c) Derivative financial instruments 26 93 10 d) Trade Receivables 55 53 5
Slide 42: Consolidated Balance Sheet (Contd.)
Consolidated Balance Sheet (Contd.) Particulars (Rs. in crores) As on Mar 31, 2021 As on Mar 31, 2020 As on Mar 31, 2019 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 173 40 77 b) Payables i) Trade payables 732 693 1,114 ii) Other payables 47 30 34 c) Debt Securiti
Slide 43: Key Subsidiaries
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 42
Slide 44: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Year ended Year ended Year ended Particulars (Rs. crores) Q4FY21 Q4FY20 March – 21 March – 20 March – 19 Loans disbursed 424 411 797 1,876 2,581 No. of Customer Contracts (nos.) 19,937 21,473 34,559 95,523 171,187 Loans & Advances (net) 7,128 7,870 7,128 7,870
Slide 45: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Year ended Year ended Year ended Particulars (Rs. in crores) Q4FY21 Q4FY20 March – 21 March – 20 March – 19 No. of Policies for the Period (nos.) 460,580 535,304 1,439,023 2,233,711 2,265,146 Net Premium 584 607 1,794 2,079 1,924 Total income 86 88 269 337 323 PBT
Slide 46: Awards & CSR Initiatives
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 45
Slide 47: Awards & Accolades CSR Initiatives
Awards & Accolades CSR Initiatives ■ Ranked 25th among India’s Best Companies to Work 2020 by ■ Launched a flagship program for the holistic development of Great Place to Work ® Institute our driver community and their family members. ■ Included 2nd time in the renowned FTSE4Good Index Series ■ This
Slide 48: Risk Management Policies
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 47
Slide 49: Risk Management Policies
Risk Management Policies Provisioning Norms Stage Description Provision Mechanism Stage 1 0- 30 days past due PD * LGD * Stage 1 Asset Stage 2 > 30 to <= 90days past due PD * LGD * Stage 2 Asset Stage 3 > 90 days past due LGD * EAD of Stage 3 Asset* The Company may also make additional management ov
Slide 50: Disclaimer
Disclaimer This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Mahindra & Mahindra Financial Services Limited (the “Company”), nor shall it or any part of it or
Slide 51: Thank You
Thank You Transforming rural lives across the country 50
Mahindra & Mahindra Financial Services — FY2021 Earnings Presentation on 6ix