Muthoot Finance Ltd · NSE:MUTHOOTFIN
Muthoot Finance — Q1 FY2019 Earnings Presentation
58 slides from Muthoot Finance's earnings presentation, June 2018
Slide 1: Financial Results Q1 FY 2019
Financial Results Q1 FY 2019 June 2018 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: Disclaimer w.r.t adoption of IND-AS
DISCLAIMER w.r.t adoption of IND-AS This is the first time adoption of Indian Accounting Standards (“IND-AS”) for the purposes of the Company’s financial reporting. The impact of the transition from previous GAAP (“I-GAAP”) has been made in the opening reserves of FY 2018 Except the quarterly
Slide 4: Consolidated Loan Assets
CONSOLIDATED LOAN ASSETS * Diversified Business of the Group * (` in million) Q1 FY 19 Q1 FY 18 YoY Growth(%) FY 2018 Consolidated Loan Assets of the 343,157 295,004 16 321,591 Group * Contribution of Subsidiaries in the Consolidated Gross Loan Assets of 10 6 - 10 the Group* (%) Q1 FY 19 Q1 FY 18 Yo
Slide 5: 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 6: MFIN - A Glimpse
MFIN - A GLIMPSE 29 161 tonnes States/Union territory presence Gold jewellery kept as security 4,300+ 145,000+ Pan-India branches Retail investor base across debenture and subordinated debt portfolio 23,000+ 200,000+ Team members Customers served every day ` 309,966 mn Loan Assets Under Management (
Slide 7: Shareholding Pattern
SHAREHOLDING PATTERN Strong promoter interest in business with 74% stake NSE Ticker 23.02 3.22 MUTHOOTFIN (%) Shareholding as on June 30, 2018 BSE Ticker Promoters & Relatives 533398 FII, FC, MF & Others Public Market Capitalisation (as on June 30, 2018) ` 151,835 million 73.76 6
Slide 8: 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 (%) 23.23 20.30 29.50 35.36
Slide 9: Geographical Presence
GEOGRAPHICAL PRESENCE A strong presence of 4344 branches across India (%) Branches region wise State wise Branch Network Jammu &Kashmir 6 13 Himachal Pradesh 62 East West Punjab 6 Chandigarh 8 178 15 Uttarakhand North South Haryana 21 Delhi 127 218 Assam 22 Rajasthan 17 (As of June 30, 2018) 135 Utt
Slide 10: 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 11: Digital Initiatives
DIGITAL INITIATIVES Online Gold Loan (OGL) • 17% 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 4.91 lakhs Muthoot Online, from WebPay earlier. downloads. • Customers can
Slide 12: Shareholder's Funds
SHAREHOLDER’S FUNDS Strong Capital Base Networth (` in million) Jun-18* Mar-18 Mar-17 Share Capital 4001 4,000 3,995 Reserves & Surplus 79,070 73,604 61,169 Total 83,071 77,604 65,164 *Under IND- AS 11
Slide 13: Migration to IND-AS- Initial Adjustment to Reserves
Migration to IND-AS- Initial Adjustment to Reserves Impact of migration to IND-AS was made in the Opening Reserves of FY 2018 Particulars (` in million) Opening Reserve & Surplus as per Indian GAAP as at 1st April 2017 65,164 Adjustments: Impact on application of Expected Credit Loss method for loan
Slide 14: Assets
ASSETS Core focus continues to be gold loan Gross Loan Assets under management* Jun-18 Mar- 18 Jun-17 Growth Growth (` in million) (` in million) (` in million) YoY (%) QoQ (%) Gross loan assets under 309,966 291,420 278,566 11 6 management Break-up of Gross Loan Assets under management Gold Loans u
Slide 15: Liabilities
LIABILITIES Stable sources of funding* Jun-18 Mar-18 Jun-17 Growth Growth (` in million) (` in million) (` in million) YoY (%) QoQ (%) Secured Non-Convertible Debentures 7,645 8,769 21,058 -64 -13 (Muthoot Gold Bonds) Secured Non-Convertible Debentures- 70,966 43,842 55,359 28 62 Listed Borrowings f
Slide 16: Revenue & Profit
REVENUE & PROFIT Profit & Loss Statement (` in million) YoY Q1 FY 2019* Q1 FY 2018* Growth FY 2018** FY 2017** (%) INCOME Interest Income 16,053 13,560 18 60,593 56,546 Other Income 277 213 30 1,839 921 Total 16,330 13,773 19 62,432 57,467 EXPENDITURE Interest Expense 5,016 5,121 (2) 19,399 22,938 P
Slide 17: Reconciliation of IND-AS Migration
Reconciliation of IND-AS Migration I-GAAP and IND-AS Reconciliation (` in million) Q1 FY 2018 Net Profit after Tax reported under Previous GAAP 3,511 Adjustments increasing/(decreasing) net profit after tax as reported in the previous GAAP: Impact on application of Expected Credit Loss method for lo
Slide 18: Gold Loan Portfolio
GOLD LOAN PORTFOLIO Gaining scale over the years Gold Loan Assets Under Management (` in billion) 330 306 300 275 278 260 272 270 243 244 216 233 240 210 180 157 150 120 90 73 60 30 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Jun-17 Mar-18 Jun-18 17
Slide 19: Gold Holding
GOLD HOLDING Carrying the trust of millions of our customers Gold jewellery kept as security (In tonnes) 180 161 160 149 155 152 137 142 140 134 131 118 120 112 100 80 66 60 40 20 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Jun-17 Mar-18 Jun-18 18
Slide 20: Geographical Spread of Gold Loan Portfolio
GEOGRAPHICAL SPREAD OF GOLD LOAN PORTFOLIO Diversified gold loan portfolio across India (%) 100 80 60 40 20 0 M ar- M ar- M ar- M ar- M ar- M ar- M ar- M ar- J un- M ar- J un- 10 11 12 13 14 15 16 17 17 18 18 East 2 3 4 5 6 6 7 7 7 8 8 West 8 8 10 11 13 15 17 18 19 19 19 Nort h 15 15 17 19 22 22 22
Slide 21: Productivity
PRODUCTIVITY Widening presence with increasing gold loan business per branch Average Gold Loan Per Branch (` in million) 75 70.35 66.39 64.23 64.82 63.69 63.2 65 57.55 55.01 56.93 55 50.63 45.74 45 35 25 15 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Jun-17 Mar-18 Jun-18 20
Slide 22: Yield on Loan Assets and NIM
YIELD ON LOAN ASSETS AND NIM Yearly* (%) Quarterly** (%) 26.00 26.00 24.00 24.00 22.34 21.70 22.00 21.66 22.00 21.35 19.94 19.72 19.31 21.43 20.00 20.00 19.67 19.72 20.27 18.00 18.00 14.68 16.00 16.00 14.75 14.00 12.24 12.74 14.00 11.17 10.81 11.69 11.38 10.84 12.00 10.47 12.00 9.79 10.00 10.00 8.77
Slide 23: Interest Spread
INTEREST SPREAD Yearly* (%) Quarterly** (%) 26.00 26.00 24.00 22.34 24.00 21.66 21.43 21.70 22.00 20.27 19.94 22.00 21.35 19.72 19.72 20.00 19.31 19.67 20.00 18.00 18.00 16.00 16.00 12..69 14.00 12.42 12.90 12.20 11.88 14.00 10.88 11.53 10.93 10.80 12.00 10.85 10.90 12.00 10.14 9.24 8.79 8.66 10.00
Slide 24: Return on Average Loan Assets
RETURN ON AVERAGE LOAN ASSETS Attractive returns over the years Yearly* (%) Quarterly** (%) 7.00 7.00 6.50 6.16 6.54 6.50 6.00 6.00 5.50 5.50 5.00 5.00 5.00 4.24 4.40 4.47 4.50 4.21 4.05 4.50 4.00 4.00 3.32 3.50 3.22 3.50 3.03 3.00 3.00 2.50 2.50 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-
Slide 25: Non-Performing Assets
NON-PERFORMING ASSETS I-GAAP (` in million) Jun-18 Mar-18 Jun-17 Mar-17 Gross Non-Performing Assets* 14,128 20,329 6,279 5,621 % of Gross NPA on Gross Loan Assets 4.56 6.98 2.25 2.06 *Includes Borrower wise classification of Rs 5,238 million in Jun’18 & Rs 7,424 million in Mar’18 which otherwise cou
Slide 26: Non-Performing Assets: Provisioning Norms
NON-PERFORMING ASSETS Provisioning Norms Stage Description Provision Mechanism Stage 1 0-30 days past due PD*LGD*Stage 1 Asset Stage 2 > 30 to <= 90 past due PD*LGD*Stage 2 Asset Stage 3 > 90 days past due LGD * EAD of Stage 3 Asset PD-Probability of default LGD-Loss given default EAD-Exposure at De
Slide 27: Liability Mix
LIABILITY MIX Maintaining a diversified funding profile* (%) Secured Non-Convertible Debentures (Muthoot Gold Bonds) – ` 7,645 mn (3%) 3 3 12 Secured Non-Convertible Debentures – Listed – ` 70,966 mn (30%) 2 2 Borrowings from Banks/Fis - ` 109,713 mn (47%) 31 Subordinated Debt – ` 5,701 mn (2%) Subo
Slide 28: 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 29: Break-up of Gross Income
BREAK-UP OF GROSS INCOME Interest Income (` in million) Yearly* Quarterly** 70,000 56,546 60,593 70,000 60,000 60,000 53,641 50,000 49,077 48,130 45,280 50,000 42,703 40,000 40,000 30,000 30,000 22,983 16,053 20,000 20,000 13,758 10,775 10,000 10,000 0 0 Q1 FY 2019 Q1 FY 2018 Mar-10 Mar-11 Mar-12 Ma
Slide 30: 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 6.00 6.00 5.63 5.39 5.50 5.50 5.01 5.1 4.90 5.00 4.72 5.00 4.28 4.46 4.54 4.50 4.50 4.02 4.08 4.00 4.00 3.50 3.50 Mar-10 Mar-11 Mar-12 Mar-13
Slide 31: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly* (` in million) Quarterly** (` in Million) Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Q1 FY 2019 Q1 FY 2018 Personnel Expenses 7,288 7,280 6,418 6,304 5,917 5,453 4,145 2,209 2,102 1,800 Rent 1,913 1,808 1,713 1,650 1,542 1,309 1,042 603 475 503 Adv
Slide 32: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly* (%) Quarterly** (%) Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Q1 FY 2019 Q1 FY 2018 Personnel Expenses 47 48 49 53 52 52 49 43 56 56 Rent 12 12 13 14 14 12 12 12 13 16 Advertisement 5 3 5 5 6 5 10 13 8 5 Postage, Telegram and 3 2 3 3 3 2 2 2 2 3 T
Slide 33: Profitability Ratios
PROFITABILITY RATIOS Yearly* (%) Quarterly** (%) (Based on Income) Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Q1 FY 2019 Q1 FY 2018 Interest expense to 31.07 39.92 46.31 48.71 53.08 52.34 52.10 44.83 30.72 37.18 Gross Income Selling, general and administrative expenses 29.42 34.88 41.36
Slide 34: Profitability Ratios
PROFITABILITY RATIOS Yearly* (%) Quarterly** (%) (Based on Average Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Q1 FY 2018 Q1 FY 2018 Loan Assets) Interest income to avg. loan 21.70 21.43 19.72 19.30 20.27 21.66 22.34 19.72 21.35 19.67 assets Interest expense to avg. 6.95 8.69 9.25 9.52 1
Slide 35: Profitability
PROFITABILITY Efforts getting rewarded Profitability at a glance (` in million) Yearly* PBT PAT Quarterly** PBT PAT 28,000 27,571 22,000 26,000 24,000 20,000 22,000 18,000 20,000 19,210 16,000 17,203 18,000 14,000 16,000 13,312 7,612 13,168 12,000 14,000 11,936 12,000 10,279 10,000 10,000 11,798 8,0
Slide 36: Net Worth
NET WORTH Steady capital position Share Capital and Reserves & Surplus (` in million) 90,000 83071 80,000 77604 70,000 65,164 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 0 Mar 10 Mar 11 Mar 12 Mar 13 Mar-14 Mar- 15 Mar-16 Mar-17 Mar-18 Jun-18* *Under IND
Slide 37: Return on Equity
RETURN ON EQUITY Stable shareholder value creation Return on Average Equity Yearly* (%) Quarterly** (%) 55 51.52 30 50 48.10 24.39 25 45 41.90 20.66 40 20 35 15 30 30.15 24.10 25 10 20 19.50 14.35 19.44 5 15 15.13 10 0 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Q1 FY 2019 Q1 FY 2
Slide 38: Capital Ratio
CAPITAL RATIO Maintaining capital well above the statutory requirement Capital Adequacy Ratio (%) Jun-18* Mar-18 Jun-17 Mar-17 Capital Adequacy Ratio 26.44 26.59 25.61 24.88 Tier-I 24.78 24.75 22.65 21.78 Tier-II 1.66 1.84 2.96 3.10 *Under IND-AS 37
Slide 39: Market Value Ratio
MARKET VALUE RATIO Equity market valuation ratios indicate potential for upside Q1 FY 2019* FY 2018 FY 2017 Earnings per share (`) - Basic 12.29 43.04 29.56 - Diluted 12.24 42.85 29.45 *Under IND-AS Jun-18 Mar-18 Mar-17 Book Value per share (`) 206.31 193.79 162.98 Market price per share (`)** 379.5
Slide 40: Capitalisation Ratios
CAPITALISATION RATIOS Headroom for further leveraging (` In million) Jun-18* Mar-18 Jun-17 Mar-17 Outside Liabilities 254,559 2,36,212 249,141 241,966 Cash & Bank Balances 8,009 4,870 21,063 15,343 Tangible Networth 82,996 77,522 68,626 65,104 Capital Gearing 2.97 2.98 3.32 3.48 *Under IND-AS 39
Slide 41: Team Strength
TEAM STRENGTH Groomed human capital over the years to meet growing business requirements (No. of Employees) 28000 25351 24881 25012 24205 23391 23455 23623 22882 22781 23000 18000 16688 13000 9745 8000 3000 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Jun-17 Mar-18 Jun-18 40
Slide 42: Our Subsidiary: Asia Asset Finance PLC
OUR SUBSIDIARY Muthoot Finance ASIA ASSET FINANCE PLC The unconventional finance company
Slide 43: 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 June 30, 2018, total holding in AAF stood at 503 million equity shares representing 60% of their total capital. The loan portfolio stands
Slide 44: 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 43
Slide 45: Branch Network
BRANCH NETWORK AAF has operations in various parts of Sri Lanka providing the best services and easy access to clients 44
Slide 46: Key Financial Parameters
Key Financial Parameters (LKR in millions) Particulars Q1 FY 2019 Q4 FY 2018 Q1 FY 2018 FY 2018 LKR / INR 0.43263 0.41551 0.41706 0.41551 Number of branches 17 17 17 17 Number of Employees 493 489 449 489 Loan AUM (LKR) 10,680 9,950 9,082 9,950 Capital Adequacy Ratio (%) 22 20 21 20 Total Revenue (L
Slide 47: Our Subsidiary: Muthoot Homefin
OUR SUBSIDIARY Muthoot Homefin G) Muthoot Finance 46
Slide 48: 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 49: Business Performance
Business Performance (` in millions) Particulars Q1 FY 2019 Q4 FY 2018 Q1 FY 2018 FY 2018 Number of branches 15 19 11 19 Number of Sales Offices 132 121 110 121 Number of Employees 243 221 135 221 Loan AUM (`) 16,210 14,648 5,957 14,648 Capital Adequacy Ratio (%) 28 28 27 28 Total Revenue (`) 497 45
Slide 50: Business Performance
Business Performance (` in millions) Particulars Q1 FY 2019 Q4 FY 2018 Q1 FY 2018 FY 2018 Disbursement (`) 1,861 3,879 1,584 10,814 Borrowings (`) 14,394 13,477 4,845 13,477 Debt Equity Ratio (%) 6.34 6.24 5.27 6.24 Yield on Advances (%) 12.09 12.16 12.67 12.27 Interest Spread (%) 3.53 3.58 3.35 3.5
Slide 51: Financial Highlights Growth
• Disbursements in Q1 FY 2019: Rs 1,861 mn. Loan Book as on Jun 30, 2018: Rs 16,210 mn • Average Ticket Size in Q1 FY 2019: Rs.0.95 mn Financial • Business Presence: Maharashtra, Gujarat, Rajasthan, Madhya Pradesh , Kerala, Andhra Pradesh,Telangana,Karnataka, Uttar Pradesh, Haryana and Chandigarh, P
Slide 52: Our Subsidiary: Muthoot Insurance Brokers
OUR SUBSIDIARY G) Muthoot Insurance Brokers &) Muthoot Finance 51
Slide 53: 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 54: Key Business Parameters, Key Financial Parameters
Key Business Parameters (` in millions) Particulars Q1 FY 2019 Q4 FY 2018 Q1 FY 2018 FY 2018 Premium Collection (` ) 495 415 157 1006 Number of Policies 4,50,376 2,05,070 2,16,301 8,41,476 Key Financial Parameters (` in millions) Particulars Q1 FY 2019 Q4 FY 2018 Q1 FY 2018 FY 2018 Total Revenue (`)
Slide 55: Our Subsidiary: Belstar Investment and Finance
® OUR SUBSIDIARY Muthoot Finance &y BELSTAR INVESTMENT AND FINANCE PRIVATE LIMITED A Subsidiary of Muthoot Finance Limited 54
Slide 56: Belstar Investment and Finance – An Overview
BELSTAR INVESTMENT AND FINANCE – AN OVERVIEW As of June 2018 , Muthoot Finance holds 71.16% 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 ef
Slide 57: Key Financial Parameters
Key Financial Parameters (` in millions) Particulars Q1 FY 2019 Q4 FY 2018 Q1 FY 2018 FY 2018 Number of branches 257 235 172 235 Number of Employees 2,046 1,783 1,240 1,783 Gross Loan AUM (`) 12,361 11,371 6,652 11,371 Capital Adequacy Ratio (%) 15 18 20 18 Total Revenue (`) 749 692 419 2,189 Total
Slide 58: 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