Muthoot Finance Ltd · NSE:MUTHOOTFIN
Muthoot Finance — Q3 FY2018 Earnings Presentation
54 slides from Muthoot Finance's earnings presentation, December 2017
Slide 1: Financial Results Q3 FY 2018
Financial Results Q3 FY 2018 December 2017 MUTHOOT FINANCE LIMITED
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT This presentation may include statements, which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position,
Slide 3: Consolidated Loan Assets
CONSOLIDATED LOAN ASSETS * Diversified Loan Book * (` in million) YoY QoQ YTD Growth Q2 FY 2018 Growth Q3 FY 2018 Q3 FY 2017 FY 2017 (%) (%) (%) Consolidated Loan Assets of 307,122 280,053 10 296,361 4 286,605 7 the Group * Contribution of Subsidiaries in the Consolidated Gross Loan 8 4 - 7 - 5 - As
Slide 4: Muthoot Finance: Driving Inclusive Growth
MUTHOOT FINANCE: DRIVING INCLUSIVE GROWTH o India’s largest gold financing company (by loan portfolio) o Trusted pan-India brand in the gold loans sector; revolutionised India’s gold banking o Our intervention has empowered millions of people across the social pyramid Multiple service offerings CORE
Slide 5: MFIN - A Glimpse
MFIN - A GLIMPSE 29 153 tonnes States/Union territory presence Gold jewellery kept as security 4,300+ 150,000+ Pan-India branches Retail investor base across debenture and subordinated debt portfolio 22,000+ 130,000+ Team members Customers served every day ` 282,648 mn Loan Assets Under Management (
Slide 6: Shareholding Pattern
SHAREHOLDING PATTERN Strong promoter interest in business with 74% stake 23.46 2.74 NSE Ticker MUTHOOTFIN (%) Shareholding as on December 31, 2017 BSE Ticker Promoters & Relatives 533398 FII, FC, MF & Others Public Market Capitalisation (as on December 31, 2017) ` 189,819 million 73.80 5
Slide 7: Dividend Payout
DIVIDEND PAYOUT Delivering consistent returns to stakeholders (%) FY 2018 FY 2017 FY 2016 FY 2015 FY 2014 Dividend (% )* 60 60 60 100 60 First Interim Dividend (%) 100 60 40 40 30 - Second Interim Dividend (%) - - 20 20 Final Dividend (%) - - - 20 10 Dividend Payout Ratio (%) - 20.30 29.50 35.36 28.
Slide 8: Geographical Presence
GEOGRAPHICAL PRESENCE A strong presence of 4303 branches across India (%) Branches region wise State wise Branch Network Jammu &Kashmir 13 6 Himachal Pradesh 5 Chandigarh Punjab 8 175 62 East West Uttarakhand 21 Haryana Delhi 15 126 219 North South Rajasthan Uttar Pradesh Assam 132 20 155 Bihar 17 (
Slide 9: Digital Initiatives
DIGITAL INITIATIVES Digital convenience for new gen & Millennium Customer acquisition Aadhaar based Electronic KYC Direct Credit Facility • Biometric KYC verification - Convenience • Loan proceeds credited to bank • No further KYC documents –Paperless account • Aadhar • NEFT/RTGS/IMPS mode of bank •
Slide 10: Digital Initiatives
DIGITAL INITIATIVES Online Gold Loan (OGL) • 16% of our active Gold loan Customers are transacting Online Muthoot Online iMuthoot App Mobile App • Our online services has now been re-branded to • Launched in Nov’16 has about 3.53 lakhs Muthoot Online, from WebPay earlier. downloads. • Customers can
Slide 11: Shareholder's Funds
SHAREHOLDER’S FUNDS Strong Capital Base Networth Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Share Capital 3,999 3,996 3,995 3,995 3,995 0 0 Reserves & Surplus 73,898 69,248 64,688 61,169 60,830 21 7 Tota
Slide 12: Assets
ASSETS Core focus continues to be gold loan Gross Loan Assets under management Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Gross loan assets 282,648 276,080 278,517 272,785 269,625 5 2 under management Br
Slide 13: Liabilities
LIABILITIES Stable sources of funding Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Secured Non-Convertible Debentures (Muthoot Gold 11,419 16,288 21,058 25,190 29,738 (62) (30) Bonds) Secured Non-Convertib
Slide 14: Revenue & Profit
REVENUE & PROFIT Profit & Loss Statement (` in million) YoY YoY QoQ 9M FY 9M FY Q3 FY Q3 FY Q2 FY Q1 FY Growth Growth Growth FY 2017 2018 2017 2018 2017 2018 2018 (%) (%) (%) INCOME Interest Income 45,370 39,558 15 15,227 13,280 15 16,385 13,758 (7) 56,546 Other Income 982 777 26 440 184 139 314 228
Slide 15: Gold Loan Portfolio
GOLD LOAN PORTFOLIO Gaining scale over the years Gold Loan Assets Under Management (` in billion) 300 260 269 272 278 275 281 270 244 243 233 240 216 210 180 157 150 120 90 73 60 33 30 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 14
Slide 16: Gold Holding
GOLD HOLDING Carrying the trust of millions of our customers Gold jewellery kept as security (In tonnes) 180 152 152 153 160 142 147 149 137 134 140 131 118 120 112 100 80 66 60 39 40 20 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 15
Slide 17: Geographical Spread of Gold Loan Portfolio
GEOGRAPHICAL SPREAD OF GOLD LOAN PORTFOLIO Diversified gold loan portfolio across India (%) 100 80 60 40 20 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 East 1 2 3 4 5 6 6 7 7 7 7 8 8 West 5 8 8 10 11 13 15 17 18 18 19 19 19 North 14 15 15 17 19 22 22
Slide 18: Productivity
PRODUCTIVITY Widening presence with increasing gold loan business per branch Average Gold Loan Per Branch (` in million) 75 66.39 63.69 64.82 64.23 65.29 62.45 63.20 65 57.55 56.93 55.01 55 50.63 45.74 45 33.50 35 25 15 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Dec-16 Mar-17 Jun-17 Sep
Slide 19: Yield on Loan Assets and NIM
YIELD ON LOAN ASSETS AND NIM Yearly (%) Quarterly (%) 26.00 26.00 24.00 24.00 23.59 21.67 22.34 21.43 21.83 22.00 22.00 21.80 20.27 19.72 20.16 21.66 19.31 19.52 20.06 20.00 20.00 19.94 19.72 16.55 18.00 18.00 15.09 14.66 16.00 16.00 12.30 12.74 14.00 14.00 10.75 11.25 11.69 11.07 11.17 11.38 12.00
Slide 20: Interest Spread
INTEREST SPREAD Yearly (%) Quarterly (%) 26 26.00 24 24.00 23.59 21.67 22.34 21.66 22 21.43 21.83 22.00 21.80 19.94 19.72 20.27 19.72 20.06 20.16 20 19.31 20.00 19.52 18 18.00 14.88 16 16.00 13.20 12.87 14 14.00 12.20 12.42 10.73 11.88 10.56 10.81 11.88 11.53 10.85 12 10.93 10.80 10.90 12.00 10.14 8
Slide 21: Return on Average Loan Assets
RETURN ON AVERAGE LOAN ASSETS Attractive returns over the years Yearly (%) Quarterly (%) 7.00 7.00 6.50 6.64 6.54 6.50 6.00 6.10 6.00 5.50 5.50 5.00 5.12 4.40 5.00 4.47 4.50 4.21 4.24 4.50 4.28 4.37 4.05 4.00 4.00 3.49 3.50 3.50 3.22 3.03 3.32 3.00 3.00 2.50 2.50 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 M
Slide 22: Non-Performing Assets & Bad Debts
NON-PERFORMING ASSETS & BAD DEBTS Non-Performing Assets (` in million) Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Gross Non-Performing Assets 15,897 12,593 6,279 5,621 7,863 Provision For Non-Performing Assets 1,975 1,571 1,019 1,019 1,019 Net Non-Performing Assets 13,922 11,021 5,260 4,602 6,844 % of Gross
Slide 23: Liability Mix
LIABILITY MIX Maintaining a diversified funding profile (%) 3 2 Secured Non-Convertible Debentures (Muthoot Gold Bonds) – ` 11,419 mn (5%) 5 7 Secured Non-Convertible Debentures – Listed – ` 45,158 mn (21%) 5 21 Borrowings from Banks/Fis - ` 120,421 mn (57%) Subordinated Debt – ` 9,389 mn (5%) Subor
Slide 24: Credit Ratings
CREDIT RATINGS Highest Rating among gold loan companies Short-term Rating Amt of rating Rating Indicates (` in million) COMMERCIAL PAPER Very strong degree of safety with regard to timely CRISIL 40,000 CRISIL A1+ payment of financial obligation and carry lowest credit risk ICRA 40,000 ICRA A1+ Very
Slide 25: Break-up of Gross Income
BREAK-UP OF GROSS INCOME Interest Income (` in million) Yearly Quarterly 60,000 56,546 60,000 53,641 45,370 50,000 49,077 48,130 50,000 45,280 42,703 39,558 40,000 40,000 30,000 30,000 15,227 22,983 20,000 13,280 16,385 13,758 20,000 10,000 10,775 10,000 6,062 0 Q3 FY Q3 FY Q2 FY Q1 FY 9M FY 9M FY 0
Slide 26: Operating Expenses to Average Loan Assets
OPERATING EXPENSES TO AVERAGE LOAN ASSETS Operational efficiency over the years Yearly (%) Quarterly (%) 8.50 8.50 8.00 8.00 7.50 7.50 7.00 7.00 6.50 6.50 6.02 6.00 6.00 5.45 5.63 5.50 5.26 5.25 5.50 5.01 5.10 5.00 5.00 4.72 4.69 4.46 4.50 4.44 4.28 4.30 4.50 4.02 4.08 4.00 4.00 3.50 3.50 Q3 FY Q3 F
Slide 27: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (` in Millions) Quarterly (` in Million) Q3 FY Q3 FY Q2 FY Q1 FY 9M FY 9M FY Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 2018 2017 2018 2018 2018 2017 Personnel Expenses 7,280 6,418 6,304 5,917 5,453 4,145 2,209 1,169 1,790 1,734 1,884 1,773 5,447 5,
Slide 28: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (%) Quarterly (%) Q3 FY Q3 FY Q2 FY Q1 FY 9M FY 9M FY Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 2018 2017 2018 2018 2018 2017 Personnel Expenses 48 49 53 52 52 49 43 43 47 57 44 56 49 57 Rent 12 13 14 14 12 12 12 11 13 15 10 16 13 14 Advertisement
Slide 29: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) (Based on Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Q3 FY Q3 FY Q2 FY Q1 FY 9M FY 9M FY Income) 2018 2017 2018 2018 2018 2017 Interest expense to 39.92 46.31 48.71 53.08 52.34 52.10 44.83 43.49 29.93 44.34 29.28 38.08 32.15 43.33 Gross Inco
Slide 30: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) (Based on Average Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Q3 FY Q3 FY Q2 FY Q1 FY 9M FY 9M FY Loan Assets) 2018 2017 2018 2018 2018 2017 Interest income to avg. 21.43 19.72 19.30 20.27 21.66 22.34 19.72 19.94 21.80 19.52 23.59 20.06 21.83
Slide 31: Profitability
PROFITABILITY Efforts getting rewarded Profitability at a glance (` in million) Yearly PBT PAT Quarterly PBT PAT 22,000 19,210 22,000 20,000 20,246 20,000 18,000 18,000 16,000 15,114 16,000 14,000 13,312 13,168 13,317 11,798 14,000 11,936 12,689 12,000 12,000 10,042 10,279 10,000 10,000 8,581 7,612
Slide 32: Net Worth
NET WORTH Steady capital position Share Capital and Reserves & Surplus (` in million) 77,897 80,000 73,244 68,683 70,000 65,164 64,825 60,000 56,192 50,835 50,000 42,646 37,356 40,000 29,257 30,000 20,000 13,344 10,000 5,845 3,712 0 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar-14 Mar- 15 Mar-16 Dec-16 Mar
Slide 33: Return on Equity
RETURN ON EQUITY Stable shareholder value creation Return on Average Equity Yearly (%) Quarterly (%) 55 30 48.10 51.52 25.60 50 24.54 25 23.65 45 20.98 41.90 18.37 18.91 40 20 35 33.90 15 30.15 30 25 10 19.44 20 19.50 5 15 14.35 15.13 0 10 Q3 FY Q3 FY Q2 FY Q1 FY 9M FY 9M FY Mar 09 Mar 10 Mar 11 Mar
Slide 34: Capital Ratio
CAPITAL RATIO Maintaining capital well above the statutory requirement Capital Adequacy Ratio (%) Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Capital Adequacy Ratio 27.65 26.49 25.61 24.88 24.66 Tier-I 25.52 23.64 22.65 21.78 22.17 Tier-II 2.13 2.85 2.96 3.10 2.49 33
Slide 35: Market Value Ratio
MARKET VALUE RATIO Equity market valuation ratios indicate potential for upside Q3 FY 2018 Q3 FY 2017 Q2 FY 2018 Q1 FY 2018 9M FY 2018 9M FY 2017 FY 2017 Earnings per share (`) - Basic 11.61 7.29 11.36 8.79 31.76 21.50 29.56 - Diluted 11.56 7.23 11.27 8.76 31.59 21.32 29.45 Dec-17 Sep-17 Jun-17 Mar-
Slide 36: Capitalisation Ratios
CAPITALISATION RATIOS Headroom for further leveraging (` In million) Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Outside Liabilities 236,707 251,228 249,141 241,966 235,598 Cash & Bank Balances 13,960 19,649 21,063 15,343 13,377 Tangible Networth 77,820 73,243 68,626 65,104 64,773 Capital Gearing 2.86 3.16 3
Slide 37: Team Strength
TEAM STRENGTH Groomed human capital over the years to meet growing business requirements (No. of Employees) 28000 25,351 24,881 25,012 24,150 24,205 23,391 22,933 22,882 22,781 22,756 23000 18000 16,688 13000 9,745 8000 5,979 3000 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Dec-16 Mar-17
Slide 38: Our Subsidiary: Asia Asset Finance PLC
OUR SUBSIDIARY Muthoot Finance ASIA ASSET FINANCE PLC The unconventional finance company
Slide 39: Asia Asset Finance PLC – An Overview
ASIA ASSET FINANCE PLC – AN OVERVIEW Asia Asset Finance PLC, (AAF) Colombo, Sri Lanka became a foreign subsidiary of Muthoot Finance on December 31, 2014 . As on Dec 31, 2017, total holding in AAF stood at 503 million equity shares representing 60% of their total capital. The loan portfolio stands a
Slide 40: Products
PRODUCTS o Fixed Deposits o Mortgage Loans o Leasing o Factoring o Business Loan o Short Term Loans o Personal Loan o Micro Finance o Group Personal Loan o Loan against Gold Jewellery o Corporate Loans 39
Slide 41: Branch Network
BRANCH NETWORK AAF has operations in various parts of Sri Lanka providing the best services and easy access to clients 40
Slide 42: Key Financial Parameters
Key Financial Parameters (LKR in millions) Particulars 9M FY 2018 9M FY 2017 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Q3 FY 2017 FY 2017 LKR / INR 0.41374 0.44929 0.41374 0.42313 0.41706 0.44929 0.42113 Number of branches 17 15 17 17 17 15 15 Number of Employees 490 433 490 481 449 433 448 Loan AUM (LKR) 9,
Slide 43: Our Subsidiary: Muthoot Homefin
OUR SUBSIDIARY Muthoot Homefin G) Muthoot Finance 42
Slide 44: Muthoot Homefin – An Overview
MUTHOOT HOMEFIN – AN OVERVIEW Muthoot Homefin (India) Limited is a Housing Finance Company registered with The National Housing Bank (NHB). It became a wholly owned subsidiary of Muthoot Finance Ltd in Aug’17. MHIL focuses on extending affordable housing finance and targets customers in Economically
Slide 45: Business Performance
Business Performance (` in millions) Particulars 9M FY 2018 9M FY 2017 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Q3 FY 2017 FY 2017 Number of branches 17 8 17 14 11 8 9 Number of Sales Offices 121 110 121 110 110 110 110 Number of Employees 194 105 194 167 135 105 111 Loan AUM (`) 10,999 2,040 10,999 8,296 5
Slide 46: Business Performance
Business Performance Particulars 9M FY 2018 9M FY 2017 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Q3 FY 2017 FY 2017 Disbursement (`) 6,935 1,750 2,890 2,461 1,584 1,096 4,158 Borrowings (`) 8,608 591 8,608 6,346 4,850 591 2,178 Debt Equity Ratio (%) 4.21 0.63 4.21 3.23 5.27 0.63 2.47 Yield on Advances (%) 12
Slide 47: Financial Highlights Growth
• Disbursements in 9M FY 2018: Rs 6,941 mn. Loan Book as on Dec 31, 2017: Rs 11,000 mn • Average Ticket Size in 9M FY 2018: Rs.1.0 mn Financial • Business Presence: Maharashtra, Gujarat, Rajasthan, Madhya Pradesh , Kerala, Andhra Pradesh,Telangana,Karnataka, Uttar Pradesh, Haryana and Chandigarh, Pr
Slide 48: Our Subsidiary: Muthoot Insurance Brokers
OUR SUBSIDIARY G) Muthoot Insurance Brokers &) Muthoot Finance 47
Slide 49: Muthoot Insurance – An Overview
MUTHOOT INSURANCE – AN OVERVIEW MIBPL became a wholly owned subsidiary of Muthoot Finance Ltd in Sep 2016. MIBPL is an unlisted private limited company holding a licence to act as Direct Broker from IRDA since 2013. It is actively distributing both life and non-life insurance products of various ins
Slide 50: Key Business Parameters, Key Financial Parameters
Key Business Parameters (` in millions) Particulars 9M FY 2018 9M FY 2017 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Q3 FY 2017 FY 2017 Premium Collection (` ) 591 438 217 216 157 148 697 Number of Policies 636,406 389,353 203,677 216,428 216,301 114,133 566,282 Key Financial Parameters (` in millions) 9M FY
Slide 51: Our Subsidiary: Belstar Investment and Finance
® OUR SUBSIDIARY Muthoot Finance &y BELSTAR INVESTMENT AND FINANCE PRIVATE LIMITED A Subsidiary of Muthoot Finance Limited 50
Slide 52: Belstar Investment and Finance – An Overview
BELSTAR INVESTMENT AND FINANCE – AN OVERVIEW As of Dec 2017 , Muthoot Finance holds 64.60% in BIFPL . BIFPL was incorporated on January 1988 at Bangalore and the Company was registered with the RBI in March 2001 as a Non- Banking Finance Company. The Company was reclassified as “NBFC-MFI” by RBI eff
Slide 53: Key Financial Parameters
Key Financial Parameters (` in millions) Particulars 9M FY 2018 9M FY 2017 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Q3 FY 2017 FY 2017 Number of branches 215 148 215 198 172 148 155 Number of Employees 1,576 1,008 1,576 1,383 1,240 1,008 1,093 Gross Loan AUM (`) 9,451 4,537 9,451 7,968 6,652 4,537 5,759 Cap
Slide 54: Registered Office
REGISTERED OFFICE 2nd Floor, Muthoot Chambers Opposite Saritha Theatre Complex Banerji Road, Kochi Kerala – 682 018. India Tel: (91484) 2394712 Fax: (91484) 2396506 CIN: L65910KL1997PLC011300 RBI Reg No: N 16.00167 EMAIL (Individual & Corporate Investors) investors@muthootfinance.com (Institutional