Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q1 FY2024 Earnings Presentation
51 slides from Edelweiss Financial Services's earnings presentation, Aug 1, 2023
Slide 1: Edelweiss Financial Services Limited Earnings update – Quarter ended Jun 23
US $ version Edelweiss Financial Services Limited Earnings update – Quarter ended Jun 23
Slide 2: Contents
Contents 1 Overview for quarter ended Jun 23 3 2 Performance highlights 6 3 Update on key priorities 11 4 Business performance 21 5 Governance & corporate responsibility 56 Please refer to the following business updates filed for more details on our insurance businesses – • General Insurance • Life
Slide 3: Overview – Quarter ended Jun 23
Overview Quarter ended Jun 23
Slide 4: Edelweiss at a glance – Quarter ended Jun 23
Edelweiss at a glance – Quarter ended Jun 23 Net Worth Ex-Insurance PAT BVPS $759 Mn $13 Mn $1 (FV $0.1) Net Debt Liquidity as a % of Debt $1,875 Mn 12% 4
Slide 5: Diversified with high-quality and well-capitalised businesses
Diversified with high-quality and well-capitalised businesses Edelweiss Financial Services Ltd (EFSL) Asset Management Credit Insurance Asset Alternative Reconstruction Housing General Mutual Fund NBFC Life Insurance Asset Mgt Finance Insurance Edelweiss Edelweiss Edelweiss Asset ECL Finance Nido Ho
Slide 6: Performance highlights – quarter ended Jun 23
Performance highlights – quarter ended Jun 23 1 Healthy profitability and upward trend on operating metrics across businesses Slide 7 - 10 2 Update on key priorities Slide 11-15 Nuvama demerger and share allotment completed; listing on track in Aug 23 Scaling Asset Management and Insurance businesse
Slide 7: Healthy profitability across businesses
1 Healthy profitability across businesses PAT for the quarter in $ Mn Asset Management Asset Reconstruction Credit 10 8 7 5 4 3 Jun 22 Jun 23 Jun 22 Jun 23 Jun 22 Jun 23 138% YoY 23% YoY 6% YoY 7
Slide 8: Earnings distribution across businesses
1 Earnings distribution across businesses $ Mn Quarter Ended Business Jun 23 Jun 22 Business Mar 22 Alternatives Asset Management 6 3 Mutual Fund 1 0 Asset Reconstruction 10 8 NBFC 4 4 Housing Finance 0 0 General Insurance (5) (5) Life Insurance (3) (7) BMU & Corporate (4) 1 EFSL Consolidated PAT (P
Slide 9: Update on operating performance
1 Update on operating performance Alternative • Fee-Paying AUM grew 23% YoY to $2,998 Mn; deployed ~$183 Mn in the quarter Asset Management • Launched first of its kind Pre-REIT offering for Indian Investors – Rental Yield Plus • AUM grew 25% YoY to $13,408 Mn; AUM market share at 2.43% Mutual Fund
Slide 10: Update on operating performance
1 Update on operating performance • Gross direct premium income growth of 31% for the quarter; against industry growth of 18% General Insurance • Inked new partnership with Dvara KGFS; activated partnerships with Maruti and Ola. • AUM recorded a robust growth of 27% YoY Life Insurance • Significant
Slide 11: Update on key priorities
2 Update on key priorities A Demerger and Listing of Nuvama Wealth Management B Scaling Asset Management and Insurance businesses C Reducing Wholesale loan assets 11
Slide 12: Demerger and Listing of Nuvama Wealth Management
A Demerger and Listing of Nuvama Wealth Management Step 1 – Capital Raise Step 2 - Demerger Step 3 - Allotment Step 4 - Listing Phase I Phase II & III Allotment Listing Capital raise in NCLT order received and Allot 30% EFSL holdings Listing of Nuvama Nuvama made effective for Phase II to Shareholde
Slide 13: Asset Management businesses showing robust AUM growth
B Asset Management businesses showing robust AUM growth Alts – Assets Under Management ($ Mn) MF – Assets Under Management ($ Mn) 5,887 13,408 10,726 4,418 3,657 7,557 Jun 21 Jun 22 Jun 23 Jun 21 Jun 22 Jun 23 AUM growth of 33% YoY AUM growth of 25% YoY 13
Slide 14: Consistent premium growth in Insurance businesses
B Consistent premium growth in Insurance businesses GI – Gross Premium for the quarter ($ Mn) LI – Gross Premium for the quarter ($ Mn) 30 18 29 14 8 26 Jun 21 Jun 22 Jun 23 Jun 21 Jun 22 Jun 23 Please refer to the Business Updates filed on our General and Life Insurance business for more details 14
Slide 15: Wholesale reduction ahead of plan; reduction of 43% YoY
C Wholesale reduction ahead of plan; reduction of 43% YoY ECLF wholesale loan assets ($ Mn) 695 695 591 366 Mar 23 Jun 23 Jun 23 Mar 24 planned actuals planned Expect momentum to continue with planned reduction 15
Slide 16: Customer Reach grows 26% YoY
3 Customer Reach grows 26% YoY Customer Reach (# in lakhs) 59 47 33 Jun 21 Jun 22 Jun 23 16
Slide 17: Well capitalised businesses
4 Well capitalised businesses Businesses Metric Value NBFC Capital Adequacy 39.8% Housing Finance Capital Adequacy 33.7% Asset Reconstruction Capital Adequacy 51.6% Life Insurance Solvency Ratio 216% General Insurance Solvency Ratio 167% 17
Slide 18: Reduced $338 Mn of Debt YoY
4 Reduced $338 Mn of Debt YoY Net Debt ($ Mn) $ Mn Business Jun 23 2,213 NBFC 809 1,875 Housing Finance 202 Alternatives 32 Asset Reconstruction 284 BMU & Corporate 804 Gross Debt 2,131 (Less) Liquidity 256 Net Debt 1,875 Jun 22 Jun 23 18
Slide 19: Cash flow plan
4 Cash flow plan $ Mn Jul 23 to Jun 24 Opening Available Liquidity 256 Expected inflows (less) expected outflows 73 Fresh borrowings 427 Disbursements (488) Closing Available Liquidity 268 19
Slide 20: Assets in each tenor range adequately cover liabilities
4 Assets in each tenor range adequately cover liabilities $ Mn Assets Liabilities Excess / (Gap) Up to 1 year 1,314 1,146 195 1-3 years 1,475 1,158 317 3 years+ 1,194 1,024 171 20
Slide 21: Business Performance – Asset Management
Business Performance Asset Management
Slide 22: Asset Management businesses at a glance
Asset Management Asset Management businesses at a glance Quarter ended Jun 23 Equity AUM Profit After Tax $98 Mn $19,295 Mn $7 Mn Fee Income $16 Mn 22
Slide 23: Alternative Asset Mgt: Business performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Business performance snapshot Key Metrics for the quarter Business Update • AUM grew 33% YoY to $5,887 Mn Equity ($ Mn) 73 • Raised AUM of $244 Mn in the quarter • Fee Paying AUM grew 23% YoY to $2,998 Mn AUM ($ Mn) 5,887 • Steady annuity fees income; 85%
Slide 24: Alternative Asset Mgt: Financial performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Financial performance snapshot $ Mn Jun 23 Jun 22 AUM 5,887 4,418 Fee Paying AUM 2,998 2,438 Equity 73 29 Net Revenue 15 8 Opex 9 5 Profit After Tax 6 3 24
Slide 25: Alternative assets overview
Alternative Asset Mgt Alternative assets overview AUM – Strategy wise Fee Paying AUM – Strategy wise AUM – Tenure wise 15% 26% 40% $5,887 Mn $2,998 Mn $5,887 Mn 60% 74% 85% Credit Real Assets Credit Real Assets Asset Over 3 year duration Asset less than 3 year duration 25
Slide 26: Mutual Fund: Business performance snapshot
Mutual Fund Mutual Fund: Business performance snapshot Key Metrics for the quarter Business Update • Equity AUM grew by 35% YoY to $3,096 Mn Equity ($ Mn) 26 • Net equity inflows of $49 Mn during the quarter • AUM grew by 25% YoY to $13,408 Mn AUM ($ Mn) 13,408 • Market share of 2.43% as on Jun 23.
Slide 27: Mutual Fund: Financial performance snapshot
Mutual Fund Mutual Fund: Financial performance snapshot $ Mn Jun 23 Jun 22 AUM 13,408 10,726 Net New Money (85) 723 Equity 26 23 Net Revenue 6 4 Opex 5 4 Profit After Tax 1 1 27
Slide 28: Consistent growth in AUM and customer base
Mutual Fund Consistent growth in AUM and customer base MF Equity AUM ($ Mn) MF Debt AUM ($ Mn) 3,096 10,068 7,959 2,291 1,645 5,314 Jun 21 Jun 22 Jun 23 Jun 21 Jun 22 Jun 23 SIP Book ($ Mn) Active Folios (# in Lakhs) 19 16 11.8 10.2 11 7.0 Jun 21 Jun 22 Jun 23 Jun 21 Jun 22 Jun 23 Growing SIP book a
Slide 29: Business Performance – Asset Reconstruction
Business Performance Asset Reconstruction
Slide 30: Asset Reconstruction: Business performance snapshot
ARC Asset Reconstruction: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 350 • Recoveries of $259 Mn for the quarter, of which 12% was from retail portfolio AUM ($ Mn) 4,772 • Deployed $54 Mn in the quarter Capital employed • Capital employed in retail assets
Slide 31: Asset Reconstruction: Financial performance snapshot
ARC Asset Reconstruction: Financial performance snapshot $ Mn Jun 23 Jun 22 AUM 4,772 4,741 Capital Employed 578 629 Wholesale assets 491 548 Retail assets 88 80 Equity 350 310 Gross Revenue 29 28 Opex 3 3 Profit After Tax 10 8 Edelweiss’ share in PAT 6 5 31
Slide 32: Business Performance – Credit
Business Performance Credit
Slide 33: Credit businesses at a glance
Credit Credit businesses at a glance Quarter ended Jun 23 Equity AUM Profit After Tax $573 Mn $1,396 Mn $5 Mn 33
Slide 34: NBFC: Business performance snapshot
NBFC NBFC: Business performance snapshot Key Metrics for the quarter Business Update • Maintained credit quality with stable asset quality ratios Equity ($ Mn) 475 o GNPA at 2.80% o Total provision cover of 278% AUM ($ Mn) 908 • Wholesale book reduced 43% YoY; expect momentum to continue Capital Ade
Slide 35: NBFC: Financial performance snapshot
NBFC NBFC: Financial performance snapshot $ Mn Jun 23 Jun 22 AUM 908 1,392 Credit Assets 843 1,324 Gross Loan Book 430 729 Gross Revenue 45 44 Net Revenue 14 10 Opex 9 8 Credit Cost (0) (3) Profit After Tax 4 4 GNPA 2.80% 2.76% NNPA 1.77% 1.93% Total Provision Cover 278% 237% 35
Slide 36: Housing Finance: Business performance snapshot
Housing Finance Housing Finance: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 97 • Portfolio continues to strengthen o GNPA at 1.93%; improved from 2.12% YoY o Collection efficiency for the quarter at 98% AUM ($ Mn) 488 • Disbursals ongoing with Standard Ch
Slide 37: Housing Finance: Financial performance snapshot
Housing Finance Housing Finance: Financial performance snapshot $ Mn Jun 23 Jun 22 AUM 488 529 Credit Assets 391 414 Gross Loan Book 363 387 Gross Revenue 13 13 Net Revenue 4 4 Opex 4 3 Credit Cost (0) 0 Profit After Tax 0 0 GNPA 1.93% 2.12% NNPA 1.47% 1.68% Total Provision Cover 68% 68% 37
Slide 38: Business Performance – Insurance
Business Performance Insurance
Slide 39: Insurance businesses at a glance
Insurance Insurance businesses at a glance Quarter ended Jun 23 Gross Premium Policies Issued Customer Reach $49 Mn # 77,600 ~50 lakhs 39
Slide 40: General Insurance: Business performance snapshot
General Insurance General Insurance: Business performance snapshot Key Metrics for the quarter Business Update • Gross direct premium income (GDPI) growth of 31% for Equity ($ Mn) 22 the quarter • Superior growth seen in the retail health segment at 81% YoY in the quarter; against industry average o
Slide 41: General Insurance: Financial performance snapshot
General Insurance General Insurance: Financial performance snapshot $ Mn Jun 23 Jun 22 Net Premium Income 11 8 Investment Income & Other 5 1 Income Total Income 16 9 Policy benefits & insurance policy 8 10 liability Other expenses 11 6 Profit After Tax (5) (5) 41
Slide 42: Life Insurance: Business performance snapshot
Life Insurance Life Insurance: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 83 • AUM recorded a robust growth of 27% YoY Individual APE ($ Mn) 8 • Traditional Par and Non-Par products constitute > 80% of product mix #Policies Issued 8,914 • Launched new ter
Slide 43: Life Insurance: Financial performance snapshot
Life Insurance Life Insurance: Financial performance snapshot $ Mn Jun 23 Jun 22 Net Premium Income 29 28 Investment Income & Other 40 (13) Income Total Income 69 15 Policy benefits & insurance policy 54 5 liability Other expenses 18 17 Profit After Tax (3) (7) Edelweiss’ share in PAT (2) (4) 43
Slide 44: Governance & Corporate Responsibility
Governance & Corporate Responsibility
Slide 45: 8 Member Board with 4 Independent Directors
8 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 46: Significant institutional ownership
Significant institutional ownership Above 1% Shareholding Pattern as on Jun 30, 2023 Key Shareholders Percent 1 Pabrai Investment Funds 9.2% Employee Trust 2 TIAA CREF funds 4.2% DIIs, Non 4.8% Promoter Group Institutions 3 BIH SA 3.9% & Others 32.8% 4 Baron Asset Management 3.8% 28.7% 5 LIC 2.6% 6
Slide 47: 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 ~$105 Mn mobilized Partnered with over 168 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 48: Our investment in communities
Our investment in communities EdelGive Foundation’s commitment to investing in communities 90 Districts Sustainable Women across 12 States Quality Education Livelihoods Empowerment 20 lakh children impacted 1.83 lakh Individuals trained 2.37 lakh women supported 31,000 schools reached 1,563 watershe
Slide 49: Trusted partner: EdelGive funding partners & networks
Trusted partner: EdelGive funding partners & networks Foundations, Corporates and HNIs partner with Edelgive Platform for their philanthropic allocation 49
Slide 50: 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 51: Safe Harbour
Safe Harbour Slide 4: Net worth includes MI, investment in CCD by CDPQ of $80 Mn, Ex-Insurance PAT is post MI Slide 4,18,19: Available Liquidity is calculated as on balance sheet date and includes high quality liquid assets and LAS book; Excludes Nuvama Slide 4,18: Debt includes accrued interest, li
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