Cholamandalam Investment And Finance Co. Ltd. · NSE:CHOLAFIN
Cholamandalam Investment And Finance — Investor Presentation (September 2018)
51 slides from Cholamandalam Investment And Finance's investor presentation, September 2018
Slide 1: Corporate Presentation – September 2018
Cholamandalam Investment and Finance Company Limited Corporate Presentation – September 2018
Slide 2: Table of Contents
Table of Contents Corporate Overview Financial Performance Business Overview Funding Profile Business Enablers Subsidiaries 2
Slide 3: Corporate Overview
& Chola Enter a better life CORPORATE OVERVIEW it murugappa
Slide 4: Company Highlights
Company Highlights 1 Positioning 2 Exceptional Lineage Established in 1978, one of India’s A part of the ₹ 300 bn Murugappa leading NBFC’s, focused in the rural Group – founded in 1900, one of and semi-urban sector with a India's leading business conglomerates market capitalisation of ₹ 182 bn1
Slide 5: Journey So Far
Journey So Far … H1 FY 2019 • Total AUM FY 2017 crossed ₹ 477 bn Consistently profit making and dividend paying1 company since 1979 • Total AUM • CRISIL and ICRA with a strong track record of dividends to shareholders FY 2015 crossed ₹ 369 bn upgraded Long • Infused Capital of term rating to ₹ 5,000
Slide 6: Major Companies – Murugappa Group
Major Companies – Murugappa Group Market Company Name Description Capitalisation Cholamandalam Investment and Finance Company Limited is a Non Banking ₹ 1,82,767 mn Finance Company and one of the leading financial provider for vehicle finance, (US$ 2,533mn) business finance, home equity loans, h
Slide 7: Shareholding
Shareholding Shareholding Pattern Chola Finance - Share Price Growth 80% Institutions, 20% 60% 40% Public, 7% 20% 0% Promoters, FII, 21% 53% -20% Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Chola FinanGe Sensex Promoters share holding of 53.07% includes Sep 17 Jan 18 Apr 18 Jul 18 Sep 18 TI Financial Hol
Slide 8: Spirit of Chola
SPIRIT OF CHOLA “The fundamental principle of economic activity is that no man you transact with will lose, then you shall not." 8
Slide 9: Strong Geographical Presence
Strong Geographical Presence Jammu & Kashmir (3) Branch Network 873 883 885 703 137 137 Punjab (20) 217 Himachal Pradesh (12) Chandigarh(1) 203 254 254 222 Harayana (27) Uttarakhand (14) 199 245 247 208 Delhi (5) 162 172 192 192 Rajasthan (69) UP (63) Assam (23) 103 36 54 55 55 Meghalaya (3) FY17 FY
Slide 10: Business Profile & AUM as on 30th Sep 2018
Business Profile & AUM as on 30th Sep 2018 Business AUM Rs. 477209 Mn Vehicle Finance (VF) Home Equity (HE) Others Rs. 354389 Mn Rs. 107265 Mn Rs. 15555 Mn 74% 23% 3% 25th year 10th year Others Tractor CE 4% HCV Trip Loans 7% Agri 1% 7% 19% Commercial SME 4% 9% 11% Older Vehicle s 13% LCV 22% Refina
Slide 11: Financial Performance
Financial Performance nier a better life 11 Murugappa
Slide 12: Financial Snapshot (IGAAP) – 10 Years
Financial Snapshot (IGAAP) – 10 Years Rs. in Mn CAGR Financials Snapshot FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 YoY (10 years) Assets under management 60,328 68,506 91,242 1,34,620 1,89,981 2,32,534 2,54,525 2,96,504 3,41,670 4,28,790 25% 24% Total Income 11,206 9,295 12,018 17,882 25,557
Slide 13: Chola – Financial Summary
Chola – Financial Summary Disbursements ^Assets Under Management (₹ mn) (₹ mn) *1,39,138 8,577 *4,77,209 *1,03,453 18,487 *4,53,276 6,623 *3,49,920 *3,64,565 9,688 15,695 10,427 *70,143 *68,995 4,106 *54,923 4,470 9,161 8,065 *48,530 9,385 3,680 9,102 2,943 7,397 8,298 38,190 56,652 42,945 55,422 81
Slide 14: Profit and Loss Statement (As per IND AS)
Profit and Loss Statement (As per IND AS) In mn Growth % Growth % Growth % Particulars Q1FY18 Q1FY19 Q2FY18 Q2FY19 H1FY18 H1FY19 Q1-o-Q1 Q2-o-Q2 Y-o-Y Disbursements 48,530 70,143 54,923 68,995 1,03,453 1,39,138 45% 26% 34% Closing Assets (Managed) 3,60,757 4,68,931 3,74,167 5,27,505 3,74,167 5,27,50
Slide 15: Balance Sheet (As per IND AS)
Balance Sheet (As per IND AS) Rs. Mn Particulars Sep-17 Mar-18 Sep-18 ASSETS Financial Assets 3,70,854 4,35,536 5,28,283 Cash and Cash Equivalents 3,367 2,538 47,360 Bank balances 6,984 6,341 6,330 Derivative financial instruments - - 2,101 Loans 3,56,493 4,21,985 4,67,516 Investments 2,580 3,195 3,
Slide 16: Balance Sheet (Cont’d) (As per IND AS)
Balance Sheet (Cont’d)(As per IND AS) Rs. Mn EQUITY AND LIABILITIES Financial Liabilities 3,30,715 3,91,273 4,78,361 Derivative financial instruments 1,028 706 - Trade payables 1,670 2,582 2,394 Debt Securities 1,50,629 1,45,553 1,66,505 Borrowings(Other than Debt Securities) 1,41,992 2,03,643 2,67,
Slide 17: Performance Highlights – Q2FY19 & H1FY19
Performance Highlights – Q2FY19 & H1FY19 Disbursements Profit after Tax ROTA (PBT) Book Value EPS* ROE* Q2-FY19 ₹ 68,995 mn ₹ 3,046 mn 3.9% ₹363.3 ₹77.9 21.8% 26% 49% 15% 22% 49% 23% Q2-FY18 ₹ 54,923 mn ₹ 2,039 mn 3.4% ₹298.2 ₹52.2 17.7% Disbursements Profit after Tax ROTA (PBT) Book Value EPS* ROE*
Slide 18: Provision Analysis – IND AS vs IGAAP
PROVISION ANALYSIS – IND AS vs IGAAP In mn Particulars Jun-17 Sep-17 Mar-18 Jun-18 Sep-18 As per IGAAP GNPA 16,827 16,526 12,779 13,768 13,472 NNPA 11,261 10,728 7,222 7,782 7,506 Provision 5,566 5,798 5,557 5,986 5,966 GNPA% 4.7% 4.5% 2.9% 3.0% 2.8% NNPA% 3.2% 2.9% 1.7% 1.7% 1.6% Provision Coverage
Slide 19: Business Overview
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Slide 20: Vehicle Finance
Enter a better life 20
Slide 21: Vehicle Finance - Industry
Vehicle Finance - Industry Trend in Domestic M & HCV Sales (i n Units) Trend in Domestic Car & MUV (i n Units) Sales CAGR @10% CAGR @ 7% 1,70,481 24,03,896 1,45,728 1,08,679 15,44,157 16,41,893 1,05,427 14,78,046 97,683 13,13,563 H1 FY-16 H1 FY-17 H1 FY-18 H1 FY-19 H1 FY-23 E H1 FY-16 H1 FY-17 H1 FY
Slide 22: Vehicle Finance - Industry
Vehicle Finance - Industry Trend in Domestic LCV Sales (i n Units) Trend in Domestic SCV Sales (i n Units) CAGR @ 10% CAGR @14% 2,20,619 4,93,103 3,13,376 1,30,624 2,60,610 78,998 83,505 83,133 1,43,229 1,60,492 H1 FY-16 H1 FY-17 H1 FY-18 H1 FY-19 H1 FY-23 E H1 FY-16 H1 FY-17 H1 FY-18 H1 FY-19 H1 FY
Slide 23: Vehicle Finance – Business Model & Positioning (CV, PV)
Vehicle Finance – Business Model & Positioning Industry Industry Low Low Low Chola Low Chola CV Position PV Position Principal Operator > 50 Vehicles Salaried Large Operators 26- 50 R R R vehicles HCV E R E I T I T S Medium Operators 10 -25 – U S Self Employed U K HCV & LCV vehicles R K with Financi
Slide 24: Vehicle Finance – Business Model & Positioning (Tractor, CE)
Vehicle Finance – Business Model & Positioning Industry Low Low Industry Low Low Chola Chola Tractor Position CE Position Large Farmer Super Strategic Strategic Captive Users / R Customer R R Prior Vehicles E R Captive Users / E I T I Prior Vehicles T S U S U K Medium Farmers Medium Retail Operator
Slide 25: Vehicle Finance - Key Differentiators
Vehicle Finance - Key Differentiators Quicker Turn Around Time – (TAT) Reputation as a long term and stable player in the market Strong dealer and manufacturer relationship Good penetration in Tier II and Tier III towns In house sales and collection team which is highly experienced and stable Low em
Slide 26: Vehicle Finance - Disbursement / Portfolio Mix – H1FY19
Vehicle Finance - Disbursement / Portfolio Mix – H1FY19 Well diversified across geography & product segments Disbursements - State wise Portfolio – State wise MP 5% AP 5% MP, 5% AP, 6% KARNATAKA 5% MAHARASHTRA MAHARASHTRA, KARNATAKA, 6% 12% 11% KERALA 4% Pondicherry 0% KERALA, 5% Pondicherry, 0% TEL
Slide 27: Vehicle Finance - Financial Summary H1FY19
Vehicle Finance - Financial Summary H1FY19 (As per IND AS) Disbursements Assets Under Management (₹ mn) (₹ mn) 1,12,074 81,135 3,54,389 3,34,908 56,652 55,422 42,945 2,43,803 2,56,606 38,190 Q1FY18 Q1FY19 Q2FY18 Q2FY19 H1FY18 H1FY19 Q1FY18 Q1FY19 Q2FY18 Q2FY19 Income Profit Before Tax (₹ mn) (₹ mn)
Slide 28: Profit and Loss Statement – Vehicle Finance
Profit and Loss Statement – Vehicle Finance (As per IND AS) In mn Growth % Growth % Growth % Particulars Q1FY18 Q1FY19 Q2FY18 Q2FY19 H1FY18 H1FY19 Q1-o-Q1 Q2-o-Q2 Y-o-Y Disbursements 38,190 56,652 42,945 55,422 81,135 1,12,074 48% 29% 38% Closing Assets (Managed) 2,43,803 3,34,906 2,56,606 3,54,389
Slide 29: Home Equity
Home Equity 29
Slide 30: Home Equity - Industry outlook
Home Equity - Industry outlook NBFCs' Loan against property book likely to grow at 12-15% in FY19 Pricing related pressure is expected to be higher in the second half of FY 19 due to narrowing funding avenues and higher systemic rates As per ICRA, Mortgage finance penetration is expected to gr
Slide 31: Home Equity - Key Differentiators
Home Equity - Key Differentiators Process Differentiator One of the best turnaround times in the industry Personalised service to customers through direct interaction with each customer Pricing Fee Income adequate to cover origination & credit cost Leverage cross sell opportunities for addit
Slide 32: Home Equity – H1FY19 Performance
Home Equity – H1FY19 Performance (As per IND AS) Disbursements In H1FY19, Disbursements has grown by 18%, over H1FY18. The business has grown the Assets by 11% in H1FY19 (YoY). Pre-closures are Asset under being controlled by better customer engagement, however it continues to be management pain
Slide 33: Home Equity - Financial Summary H1FY19
Home Equity - Financial Summary H1FY19 (As per IND AS) Disbursements Assets Under Management (₹ mn) (₹ mn) *1,03,584 *1,07,265 *96,090 *96,612 18,487 10,427 9,652 9,161 8,065 15,695 9,385 9,102 8,298 7,397 86,929 93,156 88,546 97,613 Q1FY18 Q1FY19 Q2FY18 Q2FY19 Q1FY18 Q1FY19 Q2FY18 Q2FY19 H1FY18 H1F
Slide 34: Profit and Loss Statement – Home Equity
Profit and Loss Statement – Home Equity (As per IND AS) In mn Growth % Growth % Growth % Particulars Q1FY18 Q1FY19 Q2FY18 Q2FY19 H1FY18 H1FY19 Q1-o-Q1 Q2-o-Q2 Y-o-Y Disbursements 7,397 9,385 8,298 9,102 15,695 18,487 27% 10% 18% Closing Assets (Managed) 96,090 1,03,584 96,612 1,07,265 96,612 1,07,26
Slide 35: Funding Profile
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Slide 36: CAR, Credit Rating and ALM Statement
CAR, Credit Rating and ALM Statement ALM Statement as on Sep 2018 ₹ mn Tier I Tier II Capital Adequacy Ratio (CAR) Time Buckets Outflows Inflows Mismatch Cum Mismatch 1–14 Days 8,459 18,822 10,364 10,364 19.68 19.29 18.64 18.36 18.34 15–30/31 Days 16,284 26,633 10,348 20,712 Over 1–2 Months 21,925 2
Slide 37: ALM Statement as of 30th September 2018
ALM Statement as of 30th September 2018 In Mn Particulars 1m >1 to 2m >2 to 3m >3 to 6m >6m to 1 yr >1 to 3 yr >3 to 5 yr >5 yr Total Cash & Cash Equivalents 28,344 10,251 8,202 5 145 1 - - 46,949 Advances 13,937 10,726 11,011 49,470 83,958 2,07,678 49,065 37,882 4,63,724 Trade Receivable & Others 3
Slide 38: Diversified Borrowings Profile
Diversified Borrowings Profile *4,66,375 ₹ mn *4,05,219 *3,77,339 *2,95,932 1,83,574 *2,53,401 1,49,044 1,31,370 77,072 46,172 23,010 46,519 1,11,200 13,813 23,005 26,058 16,578 6,631 26,500 1,16,092 1,05,702 1,14,846 12,449 1,02,992 48,466 26,087 28,337 34,737 36,267 38,122 Mar-16 Mar-17 Mar-18 Q1F
Slide 39: Business Enablers
Business Enablers C --- TECHNOLOGY LEVERAGE Enter a better life 39
Slide 40: Technology Updates
Technology Updates Technology Infrastructure Systems of Record Delivering resilient & scalable environment Stable foundation for core products & services Widen the coverage of asset management software to Additional domain specific metrics added to MIS for usage by improve the tracking mechanism
Slide 41: Risk Management
Risk Management Risk Management Committee (RMC): Risk Management (contd..) RMC comprises Chairman, three Independent Directors and Post sanction monitoring helps to identify portfolio trends and the Managing Director besides the senior management as implement necessary policy changes members. •
Slide 42: Subsidiaries
Subsidiaries & Chola 2G Enter a better life 42 Murugappa
Slide 43: Subsidiaries (As per IND AS)
Subsidiaries (As per IND AS) ₹ mn Cholamandalam Securities Ltd ₹ mn Cholamandalam Home Finance Ltd 184 89 124 90 43 65 21 7 14 47 5 3 10 20 (40) (86) Q2FY18 Q2FY19 H1FY18 H1FY19 Q2FY18 Q2FY19 H1FY18 H1FY19 Income PAT Income PAT Broking services to HNIs and Institutional Investors Presence across
Slide 44: ECL Methodology
ECL Methodology 44 Murugappa
Slide 45: Measurement Framework
Measurement Framework Asset ECL classification PD12 m Stage 1 LGD EAD Staging Lifetime ECL Retail Stage 2 Framework Basis Account Conduct it is classified into different stages PD : Probability of default PD(100%) LGD : Loss given default Stage 3 LGD EAD : Exposure at time of default EAD Dis
Slide 46: Measurement Framework
Measurement Framework Asset ECL Description classification PD12 m • Assets with low risk (0-30 DPD) on reporting date Stage 1 LGD • Loss estimate based on a 1 year forward estimate EAD Lifetime • Assets with Significant Increase in Credit Risk (SICR) since initial recognition Stage 2 • Assets wi
Slide 47: Retail Pooling
Retail Pooling Cholamandalam Investments and Finance Co. Ltd. Portfolios are segmented based on the below categories. PD term structure and LGDs are computed for each segment separately. Home Vehicle Finance Home Equity Others Loan LCV/CAR/MUV MLCV/2W/3W HCV New HE Delhi HE Tamil Nadu New New HE Pun
Slide 48: Ind AS Transition – Impact in Financials
Ind AS Transition – Impact in Financials 48
Slide 49: Contact Us
Contact Us Our Registered Office: Cholamandalam Investment and Finance Company Limited (Chola), Dare House 1st Floor, No. 2, NSC Bose Road, Parrys, Chennai 600001. Toll free number : 1800-200-4565 (9 AM to 7 PM) Land Line: 044 – 3000 7172 http://www.cholamandalam.com Email-ID : Sujatha P-Sr. Vice Pr
Slide 50: Disclaimer
Disclaimer • Certain statements included in this presentation may be forward looking statements made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Cholamandalam Investment and Finance Company Ltd and its subsidiaries. There can
Slide 51: Thank You
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Cholamandalam Investment and Finance Company — Investor Presentation (September 2018) on 6ix