Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q4 FY2023 Earnings Presentation
60 slides from Edelweiss Financial Services's earnings presentation, May 26, 2023
Slide 1: Investor Presentation cover letter to exchanges
EW/Sec/2023-24/52 May 26, 2023 BSE Limited National Stock Exchange of India Limited P J Towers, Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E), Mumbai – 400 001. Mumbai – 400 051. Scrip Code: 532922 Symbol: EDELWEISS Dear Sir/Madam, Sub: Investor Presentation Please find attach
Slide 2: Earnings update – Quarter and Year ended Mar 23
Edelweiss Financial Services Limited Earnings update – Quarter and Year ended Mar 23
Slide 3: Contents
Contents 1 Overview for quarter and year ended Mar 23 3 2 Performance highlights 6 3 Outlook for next 18 months 24 4 Business performance 26 5 Governance & corporate responsibility 56 Please refer to update filed for more details – • Strategic update – Demerger of Nuvama Wealth Management 2
Slide 4: Overview Quarter and Year ended Mar 23
Overview Quarter and Year ended Mar 23
Slide 5: Edelweiss at a glance – year ended Mar 23
Edelweiss at a glance – year ended Mar 23 Net Worth Ex-Insurance PAT BVPS INR 8,502 Cr INR 610 Cr INR 72 (FV ₹1) Net Debt Liquidity as a % of Debt INR 16,360 Cr 15% 4 Liquidity and Net Debt excludes Wealth Management
Slide 6: 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 Wealth Alternative Reconstruction Housing General Management Mutual Fund NBFC Life Insurance Asset Mgt Finance Insurance Edelweiss Edelweiss Edelweiss Asset E
Slide 7: Performance highlights – quarter and year ended Mar 23
Performance highlights – quarter and year ended Mar 23 1 Ex-Insurance PAT grows by 51% YoY for the year; nearly doubles YoY for the quarter Slide 7 - 10 2 Significant progress achieved on our key priorities - Slide 11-18 Nuvama demerger and value unlock: Record date June 2 for determining shareholde
Slide 8: Healthy profitability across businesses
1 Healthy profitability across businesses PAT for the year in INR Cr EFSL Asset Asset Credit ex-Insurance Management Reconstruction 610 318 253 177 405 155 112 67 Mar 22 Mar 23 Mar 22 Mar 23 Mar 22 Mar 23 Mar 22 Mar 23 51% YoY 164% YoY 26% YoY 38% YoY 7
Slide 9: Earnings distribution across businesses
1 Earnings distribution across businesses INR Cr Quarter Ended Year ended Business Mar 23 Mar 22 Mar 23 Mar 22 Business Mar 23 Mar 22 Mar 23 Mar 22 Alternatives Asset Management 43 15 159 47 Mutual Fund 0 (7) 18 20 Asset Reconstruction 93 64 318 253 NBFC 37 56 139 98 Housing Finance 3 8 16 14 Genera
Slide 10: Update on operating performance
1 Update on operating performance Alternative • Fee-Paying AUM grew 32% YoY to INR 23,200 Cr; deployments grew 75% YoY Asset Management • Launched perpetual AUM product - AnZen InvIT • AUM grew 24% YoY to INR 105,000 Cr; AUM market share improves 45 bps YoY to 2.61% Mutual Fund • Retail folios grew
Slide 11: Update on operating performance
1 Update on operating performance • Gross direct premium income (GDPI) growth of 53% for FY23, highest amongst GI players General Insurance • Total policies issued in the year grew 31% YoY to ~388,000 • Achieved Embedded Value (EV) break even in our Life Insurance business Life Insurance • Individua
Slide 12: Update on key priorities for FY23
2 Update on key priorities for FY23 A Demerger and Listing of Nuvama Wealth Management B Scaling Asset Management and Insurance businesses C Reducing Wholesale loan assets Please refer to update filed for more details – • Strategic update – Demerger of Nuvama Wealth Management 11
Slide 13: Win-win-win for all stakeholders
A Win-win-win for all stakeholders For Nuvama • Deal led to primary infusion of capital into the business • Nuvama is now an independent business with a focused strategy and the flexibility to attract business-specific partners and investors • Paved the way for listing of Nuvama For Shareholders of
Slide 14: Update and next steps
A Update and next steps 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 Shareholders of Wealth Management dem
Slide 15: Alternatives – 52% growth in AUM YoY; FPAUM up 32%
B Alternatives – 52% growth in AUM YoY; FPAUM up 32% Assets under Management (INR Cr) Fee Paying AUM (INR Cr) 46,500 23,200 30,000 30,500 17,600 14,150 Mar 21 Mar 22 Mar 23 Mar 21 Mar 22 Mar 23 Raised INR 14,000 Cr in the year Deployed INR 7,000 Cr in the year 14
Slide 16: MF – AUM growth of 24% YoY
B MF – AUM growth of 24% YoY Assets under Management (INR Cr) Total Folios (# in lakhs) 1,05,000 11.7 9.7 85,000 55,000 5.5 Mar 21 Mar 22 Mar 23 Mar 21 Mar 22 Mar 23 Inflows of INR 22,100 Cr in the year YoY growth of 21% in Total Folios 15
Slide 17: GI – Gross Premium growth of 53% YoY for the year
B GI – Gross Premium growth of 53% YoY for the year GI – Gross Premium for the year (INR Cr) GI – Number of policies issued (#) 552 3,87,800 2,96,800 361 1,88,200 226 Mar 21 Mar 22 Mar 23 Mar 21 Mar 22 Mar 23 2nd highest growth in the industry Growth of 31% YoY 16
Slide 18: LI – Achieved Embedded Value breakeven in the year
B LI – Achieved Embedded Value breakeven in the year LI – Gross Premium for the year (INR Cr) LI – Assets under Management (INR Cr) 6,637 1,676 5,490 1,460 1,220 4,220 Mar 21 Mar 22 Mar 23 Mar 21 Mar 22 Mar 23 Premium up of 15% YoY AUM grew 21% YoY 17
Slide 19: Wholesale reduction on track; reduction of ~40% in the year
C Wholesale reduction on track; reduction of ~40% in the year ECLF wholesale loan assets (INR Cr) 9,350 Planned reduction on track 6,000 5,700 3,000 Mar 22 Mar 23 Mar 23 Mar 24 planned actuals planned Expect momentum to continue with planned reduction of ~50% in FY24 18
Slide 20: Customer franchise continues to grow
3 Customer franchise continues to grow Customer Reach (# in lakhs) Customer Assets (INR Cr) 67 4,13,800 3,57,700 49 2,80,800 41 Mar 21 Mar 22 Mar 23 Mar 21 Mar 22 Mar 23 Growth of 36% YoY Growth of 16% YoY 19
Slide 21: Well capitalised businesses
4 Well capitalised businesses Businesses Metric Value NBFC Capital Adequacy 34.3% Housing Finance Capital Adequacy 32.0% Asset Reconstruction Capital Adequacy 47.1% Life Insurance Solvency Ratio 220% General Insurance Solvency Ratio 180% 20
Slide 22: Debt distribution across businesses
4 Debt distribution across businesses INR Cr Business Mar 23 NBFC 7,910 Housing Finance 1,850 Alternatives 245 Asset Reconstruction 2,915 BMU & Corporate 6,340 Gross Debt 19,260 (Less) Liquidity 2,900 Net Debt 16,360 21
Slide 23: Cash flow plan
4 Cash flow plan INR Cr Apr 23 to Mar 24 Opening Available Liquidity 2,900 Expected inflows (less) expected outflows (900) Fresh borrowings 4,700 Disbursements (3,600) Closing Available Liquidity 3,100 22
Slide 24: Assets in each tenor range adequately cover liabilities
4 Assets in each tenor range adequately cover liabilities INR Cr Assets Liabilities Excess / (Gap) Up to 1 year 12,700 11,700 1,000 1-3 years 13,600 9,200 4,400 3 years+ 10,900 8,500 2,400 23
Slide 25: Outlook for next 18 months
Outlook for next 18 months Ge Edelweiss Ideas create, values protect
Slide 26: Outlook for next 18 months
Outlook for next 18 months • Creating value by building and scaling asset light and retail businesses o Alternatives – Focusing on deployment of dry powder with emphasis on new fund raise o Mutual Fund – Expanding Equity AUM while maintaining leadership in Debt o Insurance – Leveraging technology an
Slide 27: Business Performance – Asset Management
Business Performance Asset Management
Slide 28: Asset Management businesses at a glance
Asset Management Asset Management businesses at a glance Year ended Mar 23 Equity AUM Profit After Tax INR 814 Cr INR 151,500 Cr INR 177 Cr Fee Income INR 449 Cr 27
Slide 29: Alternative Asset Mgt: Business performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Business performance snapshot Key Metrics for the quarter Business Update • Raised AUM of ~INR 14,000 Cr in the year; INR 2,200 Cr in the Equity (INR Cr) 614 quarter • Deployments grew 75% YoY leading to FPAUM growth of 32% AUM (INR Cr) 46,500 YoY • Stead
Slide 30: Alternative Asset Mgt: Financial performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Financial performance snapshot INR Cr Quarter ended Quarter ended Year ended Year ended Mar 23 Mar 22 Mar 23 Mar 22 AUM 46,500 30,500 46,500 30,500 Fee Paying AUM 23,200 17,600 23,200 17,600 Equity 614 216 614 216 Net Revenue 118 92 396 282 Opex 71 76 219
Slide 31: Alternative assets overview
Alternative Asset Mgt Alternative assets overview AUM – Strategy wise Fee Paying AUM – Strategy wise AUM – Tenure wise 15% 24% 37% INR 46,500 Cr INR 23,200 Cr INR 46,500 Cr 63% 76% 85% Credit Real Assets Credit Real Assets Asset Over 3 year duration Asset less than 3 year duration 30
Slide 32: Mutual Fund: Business performance snapshot
Mutual Fund Mutual Fund: Business performance snapshot Key Metrics for the quarter Business Update • AUM grew by 24% YoY to INR 105,000 Cr; AUM market share improved by 45 bps YoY to 2.61% Equity (INR Cr) 200 • Net inflows of INR 6,550 Cr for the quarter with total net inflows of INR 22,100 Cr for t
Slide 33: Mutual Fund: Financial performance snapshot
Mutual Fund Mutual Fund: Financial performance snapshot INR Cr Quarter ended Quarter ended Year ended Year ended Mar 23 Mar 22 Mar 23 Mar 22 AUM 105,000 85,000 105,000 85,000 Net New Money 6,550 4,100 22,100 28,900 Equity 200 182 200 182 Revenue 43 43 168 167 Opex 43 50 150 147 Profit After Tax 0 (7
Slide 34: Consistent growth in AUM and customer base
Mutual Fund Consistent growth in AUM and customer base MF Equity AUM (INR Cr) MF Debt AUM (INR Cr) 22,700 80,200 19,600 61,700 10,600 39,550 Mar 21 Mar 22 Mar 23 Mar 21 Mar 22 Mar 23 SIP Book (INR Cr) Active Folios (# in Lakhs) 169 173 11.7 125 9.7 5.5 Mar 21 Mar 22 Mar 23 Mar 21 Mar 22 Mar 23 Growi
Slide 35: Business Performance – Asset Reconstruction
Business Performance Asset Reconstruction
Slide 36: Asset Reconstruction: Business performance snapshot
ARC Asset Reconstruction: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 2,794 • Recoveries of INR 1,663 Cr for the quarter; INR 7,530 Cr in the year of which 13% was from retail portfolio AUM (INR Cr) 37,100 • Deployed INR 382 Cr in the quarter; INR 1,467
Slide 37: Asset Reconstruction: Financial performance snapshot
ARC Asset Reconstruction: Financial performance snapshot INR Cr Quarter ended Quarter ended Year ended Year ended Mar 23 Mar 22 Mar 23 Mar 22 AUM 37,100 40,200 37,100 40,200 Capital Employed 4,700 5,016 4,700 5,016 Wholesale assets 3,930 4,336 3,930 4,336 Retail assets 770 680 770 680 Equity 2,794 2
Slide 38: Business Performance – Credit
Business Performance Credit
Slide 39: Credit businesses at a glance
Credit Credit businesses at a glance Year ended Mar 23 Equity AUM Profit After Tax INR 4,658 Cr ~INR 12,000 Cr INR 155 Cr 38
Slide 40: 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 (INR Cr) 3,864 o GNPA at 2.07%; improved 69 bps YoY o Total provision cover of 409% AUM (INR Cr) 7,847 • Wholesale book reduction of ~40% in the ye
Slide 41: NBFC: Financial performance snapshot
NBFC NBFC: Financial performance snapshot INR Cr Quarter ended Quarter ended Year ended Year ended Mar 23 Mar 22 Mar 23 Mar 22 AUM 7,847 12,592 7,847 12,592 Credit Assets 7,314 11,998 7,314 11,998 Gross Loan Book 4,429 6,763 4,429 6,763 Gross Revenue 401 403 1,680 1,841 Net Revenue 135 79 597 355 Op
Slide 42: Housing Finance: Business performance snapshot
Housing Finance Housing Finance: Business performance snapshot Key Metrics for the quarter Business Update • Portfolio continues to strengthen Equity (INR Cr) 794 o GNPA at 1.91%; improved from 1.99% YoY o Quarterly collection efficiency at 97.79% AUM (INR Cr) 4,115 • Total disbursals of ~INR 1,000
Slide 43: Housing Finance: Financial performance snapshot
Housing Finance Housing Finance: Financial performance snapshot INR Cr Quarter ended Quarter ended Year ended Year ended Mar 23 Mar 22 Mar 23 Mar 22 AUM 4,115 4,400 4,115 4,400 Credit Assets 3,287 3,407 3,287 3,407 Gross Loan Book 3,069 3,145 3,069 3,145 Gross Revenue 115 121 445 514 Net Revenue 37
Slide 44: Business Performance – Insurance
Business Performance Insurance
Slide 45: Insurance businesses at a glance
Insurance Insurance businesses at a glance Year ended Mar 23 Gross Premium Policies Issued Customer Reach INR 2,228 Cr # 444,380 ~47 lakhs 44
Slide 46: 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 53% for Equity (INR Cr) 174 FY23, highest amongst GI players • Consistent growth in focus segments - Motor & Health grew by 52% & 56% in FY23;
Slide 47: General Insurance: Financial performance snapshot
General Insurance General Insurance: Financial performance snapshot INR Cr Quarter ended Quarter ended Year ended Year ended Mar 23 Mar 22 Mar 23 Mar 22 Net Premium Income 85 63 307 233 Investment Income & Other 27 17 81 59 Income Total Income 112 80 388 292 Policy benefits & insurance policy 54 252
Slide 48: Life Insurance: Business performance snapshot
Life Insurance Life Insurance: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 678 • Achieved Embedded Value break-even with focus on margin and capital management • Embedded Value of INR 1,844 Cr as on Mar 23 Individual APE (INR Cr) 233 • Individual APE cro
Slide 49: Life Insurance: Financial performance snapshot
Life Insurance Life Insurance: Financial performance snapshot INR Cr Quarter ended Quarter ended Year ended Year ended Mar 23 Mar 22 Mar 23 Mar 22 Net Premium Income 669 556 1,640 1,424 Investment Income & Other 55 47 360 479 Income Total Income 724 603 2,000 1,903 Policy benefits & insurance policy
Slide 50: Business Performance – Wealth
Business Performance Wealth
Slide 51: Wealth Management: Business performance snapshot
Wealth Mgt Wealth Management: Business performance snapshot Key Metrics for the quarter Business Update • AUA grew 12% YoY AUA (INR Cr) 2,25,200 • Robust net new money of ~INR 14,930 Cr in the year; growth of 16% YoY LAS loan book ~3,770 • Distribution income increased by 62% YoY (INR Cr) • Loan aga
Slide 52: Wealth Management: Financial performance snapshot
Wealth Mgt Wealth Management: Financial performance snapshot INR Cr Quarter ended Quarter ended Year ended Year ended Mar 23 Mar 22 Mar 23 Mar 22 AUA 225,200 2,02,000 225,200 2,02,000 Equity 2,256 1,833 2,256 1,833 Gross Revenue 605 413 2,215 1,600 Net Revenue 513 336 1,825 1,327 Opex 495 282 1,424
Slide 53: Governance & Corporate Responsibility
Governance & Corporate Responsibility
Slide 54: 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 55: Significant institutional ownership
Significant institutional ownership Above 1% Shareholding Pattern as on Mar 31, 2023 Key Shareholders Percent 1 Pabrai Investment Funds 8.5% Employee Trust 2 BIH SA 4.8% DIIs, Non 4.8% Promoter Group Institutions 3 TIAA CREF funds 4.3% & Others 32.6% 4 Baron Asset Management 4.2% 28.4% 5 LIC 2.6% 6
Slide 56: 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 ~INR 858 Cr 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 av
Slide 57: Our investment in communities
Our investment in communities EdelGive Foundation’s commitment to investing in communities 92 Districts Sustainable Women across 13 States Quality Education Livelihoods Empowerment 20 lakh children impacted 1.1 lakh Individuals trained 2.3 lakh women supported 31,000 schools reached 1,750 watershed
Slide 58: Trusted partner: EdelGive funding partners & networks
Trusted partner: EdelGive funding partners & networks Foundations, Corporates and HNIs partner with Edelgive Platform for their philanthropic allocation 57
Slide 59: 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 60: Safe Harbour
Safe Harbour Slide 4: Net worth includes MI, investment in CCD by CDPQ of INR 656 Cr and excludes Nuvama, Ex-Insurance PAT is post MI Slide 4,21,22: Available Liquidity is calculated as on balance sheet date and includes high quality liquid assets and LAS book; Excludes Nuvama Slide 4,21: Debt inclu
Edelweiss Financial Services — Q4 FY2023 Earnings Presentation on 6ix