Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q1 FY12 Earnings Presentation
38 slides from Mahindra & Mahindra Financial Services's earnings presentation, June 2011
Slide 1: Mahindra & Mahindra Financial Services Limited Quarter Result Update
Mahindra & Mahindra Financial Services Limited Quarter Result Update JUNE - 2011
Slide 2: Company overview
Company overview 2
Slide 3: Background
Background Mahindra & Mahindra Financial Services Limited (M&MFSL) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 439 billion)*, one of India’s leading tractor and utility vehicle manufacturers M&MFSL (Mcap: Rs 70 billion)* is one of India’s leading non-banking finance companies focu
Slide 4: M&MFSL Group structure
M&MFSL Group structure Mahindra and Mahindra Limited 56% M&MFSL 87.5% , balance 100% 12.5% with National 49% 100% Housing Bank Mahindra Finance Mahindra Rural Mahindra Insurance USA LLC Mahindra Business & Housing Brokers Limited (Joint venture Consulting Services Finance Limited (“MIBL”) with Rabob
Slide 5: Shareholding pattern
Shareholding pattern (as on June 30, 2011) Public ESOP Trust 4.6% 1.4% DII (Mutual Funds) 3.5% FII Promoters 34.5% 56.0% Incorporated in 1991 and initially provided financing to dealers of Mahindra & Mahindra Limited The Company also issued shares to the ESOS trust in December 2005 The Company
Slide 6: Competitive strengths
Competitive strengths 6
Slide 7: Competitive strengths
Competitive strengths Product portfolio and knowledge catering to rural and semi-urban #1 markets #2 Extensive network of branches #3 Established track record #4 Synergies with Mahindra Group and brand recall #5 Experienced management team and board #6 History of strong customer and dealer relations
Slide 8: Product portfolio and knowledge catering to rural and semi-urban markets
Product portfolio and knowledge catering to rural and semi-urban markets Vehicle Loans for auto and utility vehicles, tractors, cars , commercial vehicles and Financing construction equipments Pre-Owned Loans for pre-owned cars, two wheelers and multi-utility vehicles Vehicles Insurance Insura
Slide 9: Break down of estimated value of Assets Financed
Break down of estimated value of Assets Financed Quarter ended Quarter ended Full year ended Segments June-11 June-10 March-11 Auto/ Utility vehicles (M&M) 27% 34% 29% Tractors (M&M) 22% 22% 22% Cars and other (including non M&M 32% 29% 33% vehicles) Commercial vehicles and 10% 7% 7% Construction eq
Slide 10: Break down of AUM
Break down of AUM As on As on As on Segments June-11 June-10 March-11 Auto/ Utility vehicles (M&M) 30% 33% 31% Tractors (M&M) 23% 23% 23% Cars and other (including non M&M 31% 30% 31% vehicles) Commercial vehicles and 10% 8% 9% Construction equipments Pre-owned vehicles and others 6% 6% 6% 10
Slide 11: Extensive branch network
Extensive branch network M&MFSL has an extensive branch network with presence in 24 states and 4 union territories in India through 559 offices as of June 30, 2011 – Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of 3 15 9 6 6 547 559 16 40 1 55 43
Slide 12: Established track record
Established track record Figures on consolidated basis Loans & Advances and Borrowings (Rs. million) Total Assets (Rs. million) Loans & Advances CAGR (FY09-FY11): 32.1% CAGR(FY09-FY11): 33.2% Borrowings CAGR (FY09-FY11): 36.9% 143,084 126,692 139,396 150,623 97,846 105,757 89,024 96,154 72,549 65,25
Slide 13: Established track record
Established track record Figures on standalone basis ROA (Avg. Assets) (%) RONW (Avg. Net Worth) (%) 4.1% 4.1% 21.5% 22.0% 3.0% 2.8% 2.9% 15.4% 15.1% 15.7% FY09 FY10 FY11 1QFY11 1QFY12 FY09 FY10 FY11 1QFY11 1QFY12 Gross NPA and Net NPA to Total Assets (%) Leverage ratio 8.7% 6.9% 3.9 4.0 6.4% 3.7 3.
Slide 14: Key Risks & Management Strategies
Key Risks & Management Strategies Volatility in interest rates Matching of asset and liabilities Rising competition Increasing branch network Raising funds at competitive rates Maintaining credit rating & improving asset quality Dependence on M&M Increasing non-M&M Portfolio Occurrence of
Slide 15: Financial Information
Financial Information 15
Slide 16: Standalone Profit & Loss Statement
Standalone Profit & Loss Statement Quarter ended Quarter ended Year ended Particulars (Rs. million) June – 11 June – 10 March – 11 Income from operations 5,477 3,924 19,739 Other income 163 90 387 Total income 5,640 4,014 20,126 Interest cost 2,160 1,315 6,602 Administrative cost 1,900 1,561 6,027 P
Slide 17: Standalone Balance Sheet
Standalone Balance Sheet As on As on As on LIABILITIES (Rs. million) June – 11 June – 10 March – 11 Shareholder’s funds 25,944 18,031 24,901 Secured loans 86,651 53,571 83,006 Unsecured loans 16,503 15,560 13,744 Current liabilities & provisions 17,944 14,865 15,890 TOTAL 147,042 102,027 137,541 As
Slide 18: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Quarter ended Quarter ended Year ended Particulars (Rs. million) June – 11 June – 10 March – 11 Income from operations 5,722 4,045 20,435 Other income 124 82 309 Total income 5,846 4,127 20,744 Interest cost 2,185 1,328 6,662 Administrative cost 2,030 1,574 6,129
Slide 19: Consolidated Balance Sheet
Consolidated Balance Sheet As on As on As on LIABILITIES (Rs. million) June – 11 June – 10 March – 11 Shareholder’s funds 26,524 18,349 25,450 Minority Interest 49 19 47 Secured loans 89,370 54,524 84,349 Unsecured loans 16,387 15,361 13,497 Current liabilities & provisions 18,293 14,946 16,053 TOTA
Slide 20: Funding
Funding M&MFSL believes that its credit rating and strong brand equity enable it to borrow funds at competitive rates Total consortium size of Rs. 10 billion comprising several banks CRISIL Rating Outlook Fixed Deposit programme FAAA Stable Short term debt A1+ Stable Long term and Subordinated d
Slide 21: Source of Borrowing
Source of Borrowing (as on June 30, 2011) Figures on standalone basis Fund Mix on the basis of Investor profile Fund Mix on the basis of Instrument Banks for Assignment Assignment (Rs.16451 (Rs.16451 mn) CP, ICD mn) 14% (Rs. 2466 14% Insurance Co. & mn) Institutions 2% (Rs.12110 mn) 10% FD (Rs.8997
Slide 22: Loan Receivables Assignment
Loan Receivables Assignment M&MFSL assigns parts of its loan receivables to third parties to improve its capital adequacy ratio and to increase the efficiency of its loan portfolio. M&MFSL has completed 46 securitisation / Assignment transactions as of June 30, 2011. Particulars (Rs. million) FY
Slide 23: Highlights for Q1-FY12 vs Q1-FY11
Highlights for Q1- FY12 Vs Q1- FY11 Figures on standalone basis Rs.5,640 mn Rs.1,022 mn Rs.38,340 mn 41% 38% 34% Rs.4,014 mn Rs.742 mn Rs.28,544 mn Total Income Profit After Tax Value of Assets Financed Assets under Management have increased from Rs.113,515 Mn to Rs.158,693 Mn year-on-year basis.
Slide 24: Summary of Results
Summary of Results Figures on standalone basis Quarter ended Quarter ended Year ended Particulars (Rs. million) June – 11 June – 10 March – 11 Total Income 5,640 4,014 20,126 Profit before tax 1,513 1,110 7,024 Profit after tax 1,022 742 4,631 Dividend (%) -- -- 100 Net Worth 25,906 18,020 24,880 EP
Slide 25: Ratio Analysis
Ratio Analysis Figures on standalone basis Quarter ended Quarter ended Year ended June – 11 June – 10 March – 11 PBT/Total Income 26.8% 27.7% 34.9% PBT/Total Assets 4.1% 4.1% 5.2% RONW (Avg. Net Worth) 15.7% 15.1% 22.0% Overheads/Total Assets 3.8% 4.3% 3.6% Debt / Equity 3.98:1 3.83:1 3.88:1 Book va
Slide 26: Spread Analysis
Spread Analysis Figures on standalone basis Quarter ended Quarter ended Year ended June – 11 June – 10 March – 11 Total Income / Average Assets 16.2% 16.6% 17.9% Interest / Average Assets 6.2% 5.5% 5.8% Gross Spread 10.0% 11.1% 12.1% Overheads / Average Assets 4.0% 4.4% 4.4% Write offs & NPA provisi
Slide 27: NPA
NPA Figures on standalone basis Particulars (Rs. million) June – 11 June – 10 March – 11 Gross Non - Performing Assets 6,776 7,105 5,488 Less: NPA Provisions 5,403 5,858 4,744 Net Non – Performing Assets 1,373 1,247 744 Total Assets (Incl. NPA Provision) 148,263 103,261 138,606 Gross NPA to Total As
Slide 28: Provisioning Norms
Provisioning Norms Duration (months) RBI Norms Duration (months) M&MFSL > 5 and <= 18 10% > 5 and <= 11 10% > 18 and <= 30 20% > 11 and <= 24 50% > 30 and <= 54 30% > 24 months 100% > 54 months 50% At M&MFSL NPA provisioning norms are more stringent than RBI norms 28
Slide 29: Technology initiatives and Employee management
Technology initiatives and Employee management 29
Slide 30: Technology initiatives
Technology initiatives Approximately 92% of our 559 offices are connected to the centralised data centre in Mumbai Through hand held devices connected by GPRS to the central server, we transfer data which provides – Prompt intimation by SMS to customers – Complete information to handle customer
Slide 31: Employee engagement & training
Employee engagement & training Training programs for employees on continuous basis. 5 days induction program on product knowledge, business processes and aptitude training. Launch of Mahindra Finance Academy for training prospective and present employees. Assessment & Development Centre for
Slide 32: Information about key subsidiaries
Information about key subsidiaries 32
Slide 33: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Quarter ended Quarter ended Year ended Particulars (Rs. million) June – 11 June – 10 March – 11 Loans disbursed 592 397 2,036 No. of Customer Contracts (Nos) 5,759 3,354 21,981 Outstanding loan book 3,665 1,671 3,152 Total income 171 74 493 PBT 23 15 122 PAT 17
Slide 34: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Quarter ended Quarter ended Year ended Particulars (Rs. million) June – 11 June – 10 March – 11 Total income 89 111 517 Net premium 1,001 697 2,891 PBT 26 68 329 PAT 17 44 218 No. of Policies for the Period (nos.) 146,130 90,421 508,877 No. of employees (nos.) 391
Slide 35: Business Strategies
Business Strategies 35
Slide 36: Business Strategies
Business Strategies Grow market share in rural and semi urban & vehicle and automobile financing market Expand nationwide network of branches Diversify product portfolio Continue to attract and retain talented employees Effective use of technology to improve productivity 36
Slide 37: Disclaimer
Disclaimer This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Mahindra & Mahindra Financial Services Limited (the “Company”), nor shall it or any part of it or
Slide 38: Thank you
Thank you @/D Mahindra Finance
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