Aditya Birla Capital Ltd. · NSE:ABCAPITAL
Aditya Birla Capital — Q1 FY21 Earnings Presentation
56 slides from Aditya Birla Capital's earnings presentation, Aug 7, 2020
Slide 1: Investor Presentation: Financial Results Q1 FY21
Investor Presentation FINANCIAL RESULTS: Q1 FY21 MUMBAI 7th August 2020 A Leading Financial Services Conglomerate Aditya Birla Capital Limited
Slide 2: Table of contents
Table of contents 1 | Overview Pg. 3 - 5 2 | Business-wise Performance Pg. 6 - 52 3 | Annexures Pg. 53 - 56 NOTE 1: The financials of Aditya Birla Capital Ltd are consolidated financials prepared based on Ind AS unless otherwise specified NOTE 2: The financial figures in this presentation have been
Slide 3: Q1 FY21: Key highlights
Q1 FY21: Key highlights Resilience across businesses despite lockdown; Maintained core operating profit in NBFC and HFC ✓ ✓ Consolidated ABCL PAT grew 1.4x q-o-q to Rs 198 Crore despite slower disbursements under lockdown NBFC PBT (ex-CoVID provision) grew by 42% q-o-q, 91% of overall ABC branches o
Slide 4: Q1 FY21: Consolidated Financials
Q1 FY21: Consolidated Financials Figures in Rs Crore Consolidated PAT grew by 1.4x q-o-q Businesses Q1 FY20 Q4 FY20 Q1 FY21 1.4x NBFC 262 137 140 270 4,293 Asset Management 117 99 97 198 3,943 Life Insurance 20 22 17 144 Housing 27 21 28 General Insurance Broking 16 (0) 21 Q1 FY20 Q1 FY21 Q1 FY20 Q4
Slide 5: Technology being leveraged in key focus areas
Technology being leveraged in 5 key focus areas 5 Focus Areas 10 outcomes using technology and analytics Pre-approved sum assured (PASA) products for existing customers Investor Portal with “Next Best Offer” & “Single Click Purchase” Pre-purchase Rs 40 Crore PASA offers (10% of Q1 FY21 Ind. FYP) Rs
Slide 6: Aditya Birla Finance Limited
Aditya Birla Finance Limited 6
Slide 7: Performance Summary for Q1 FY21
Performance Summary for Q1 FY21 1. Restarted lending with caution during the quarter. Gradual ramp up of activity in Q1 with greater momentum in July ➢ 100% branches operational. Rebound witnessed in gross disbursal: ➢ Disbursements in Q1 FY21: 37% of Q1 FY20 | 42% of Q4 FY20 ➢ Disbursements in Jul’
Slide 8: Revival in disbursements with focus on target segments
Revival in disbursements with focus on target segments Figures in Rs Crore Revival in disbursements Focusing new disbursement in target segments Disbursements in Q1 FY21: 37% of Q1 FY20 | 42% of Q4 FY20 3,546 Disbursals 1,313 910 Q1 FY20 Q1 FY21 Jul'20 Focus on secured TL/ WCDL segment SME Broker Fu
Slide 9: Building granularity across segments
Building granularity across segments Loan book 13,405 12,778 12,541 Loan Book 23,615 21,344 20,847 % Mix 27% 27% 27% % Mix 47% 45% 45% Large/ Mid Corporate ATS (Rs Crore) 7 5 5 ATS (Rs Crore) 66 59 59 2% 1% 1% 8% 7% 11% 9% Structured Finance 12% Broker Funding 11% 13% 14% SME 21% 14% 23% 21% Supply
Slide 10: Maintaining core operating profit
Maintaining core operating profit Figures in Rs Crore Maintained core NII q-o-q 11% Q-o-Q reduction in opex; In-line with guidance for the year Net Interest Income1,3 Cost Income Ratio3 0.27% 0.24% 0.08% Fee Income 33.5% 31.3% Core NIM 4.98% 26.5% 4.76% 4.80% Q1 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q4 FY20
Slide 11: Increased provisions given the environment
Increased provisions given the environment Stage-wise assets and with enhanced provision coverage Update on Stage 3 Moratorium Q4 FY20 Q1 FY21 ▪ Stage 3 PCR increased from ▪ 28% of AUM under moratorium; Figures in Rs Crores Stage 1 & 2 Stage 3 Stage 1 & 2 Stage 3 33.3% to 38.6% Reducing as lockdown
Slide 12: Well matched ALM with adequate liquidity
Well matched ALM with adequate liquidity Figures in Rs Crore ALM optimised for liquidity and costs (As on 30th June 2020) Adequate liquidity under stress test scenario Liability Maturity (FY21) Fund Available as on 31st July 2020 100% 100% (Assuming 50% of collections) Cumulative Inflows Cumulative
Slide 13: Leveraging technology
Leveraging technology Figures in Rs Crore Technology initiatives + Digital Assets deployed Outcomes Customer Onboarding Distributor onboarding % Customers onboarded Digital Distributor Onboarding ➢ Deployed paperless onboarding using OCR, ➢ Launched digital platform for distributor Digitally Video K
Slide 14: Key Financials – Aditya Birla Finance Limited
Key Financials – Aditya Birla Finance Limited Figures in Rs Crore Quarter 1 Quarter 4 Quarter 1 Key Performance Parameters FY 19-20 FY 19-20 FY 20-21 (PY) (PY) (CY) Lending book 50,171 47,057 45,939 Average yield (Incl. Fee Income) 12.44% 12.08% 11.70% Interest cost / Avg. Lending book 7.19% 7.08% 6
Slide 15: Aditya Birla Housing Finance Limited
Aditya Birla Housing Finance Limited 15
Slide 16: Performance Summary for Q1 FY21
Performance Summary for Q1 FY21 1. Restarted lending with caution during the quarter with operations gradually heading back to normal ➢ Logins (Count) in Jul’20: 84% of PY | Jun’20: 53% of PY ➢ Gross disbursals (Value) in Jul’20: ~53% of PY | Jun’20: 23% of PY | Gross disbursement in Jul’20 was ~2x
Slide 17: Gradual recovery in disbursement
Gradual recovery in disbursement Figures in Rs Crore Growing loan book with increased retail mix Change in Loan Book and Disbursement Mix Loan Book Retail Mix Home Loans Affordable Increasing Reduction in Greater Granularity Realization Construction Finance 2Y CAGR: 15% 2Y: 91% → 96% 2Y CAGR: 19% 3.
Slide 18: Sourcing strategy and customer mix
Sourcing strategy Figures in Rs Crore Diversified Geographic Mix (%) Focus on increasing reach and building retail granularity Metros Non-Metros Home Loans Sourcing 4,430 4,558 40% 42% 42% 3,792 3,592 Non-metro loan 13% 11% 11% book mix at 45% 19% 19% 19% 65 branches currently operational pan-India
Slide 19: Delivering strong core operating profits
Delivering strong core operating profits Figures in Rs Crore Maintained margins with change in product mix CIR maintained with opex at similar levels as Q1 FY20 Net Interest Income1 Cost Income Ratio 45.9% 42.3% 45.7% 84 76 84 Q1 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q4 FY20 Q1 FY21 NIM1 % 2.98% 2.96% 3.27%
Slide 20: Update on portfolio quality
Update on portfolio quality Figures in Rs Crore Stage-wise assets and provision coverage Moratorium Collections & Security Cover Q4 FY20 Q1 FY21 ▪ 28% of retail loan book under ▪ Collection efficiency in loan book Figures in Rs Crores Stage 1 & 2 Stage 3 Stage 1 & 2 Stage 3 moratorium; ↓ as lockdown
Slide 21: Well matched ALM with adequate liquidity
Well matched ALM with adequate liquidity Figures in Rs Crore ALM optimised for liquidity and costs (As on 30th June 2020) Adequate liquidity under stress test scenario 100% 100% Liability Maturity (FY21) Fund Available as on 31st July 2020 Cumulative Outflows Cumulative Inflows 88% (Including intere
Slide 22: Leveraging technology
Leveraging technology Figures in Rs Crore Technology initiatives + Digital Assets deployed Outcomes Onboarding Digital Collections Digital Onboarding % Customer interactions on digital channels ▪ Launched Voice Bot for collections and • Mobile App launched for Digital onboarding moratorium calling i
Slide 23: Value accretive growth
Value accretive growth Figures in Rs Crore PAT Return on Assets Return on Equity1 PAT (ex-CoVID provision) at Rs 37 Cr (PQ: Rs 35 Cr) RoA (ex-CoVID provision) at 1.24% (PQ: 1.18%) RoE (ex-CoVID provision) at 11.2% (PQ: 11.66%) 9.24% 0.92% 0.92% 8.25% 0.69% 6.82% 27 28 21 Q1 FY20 Q4 FY20 Q1 FY21 Q1 F
Slide 24: Key Financials – Aditya Birla Housing Finance Limited
Key Financials – Aditya Birla Housing Finance Limited Figures in Rs Crore Quarter 1 Quarter 4 Quarter 1 Key Performance Parameters FY 19-20 FY 19-20 FY 20-21 (PY) (PY) (CY) Lending book 11,827 12,102 12,134 Average yield 10.47% 10.28% 10.36% Net Interest cost / Avg. Loan book 7.53% 7.38% 7.16% NIM (
Slide 25: Aditya Birla Sun Life AMC Limited
Aditya Birla Sun Life AMC Limited 25
Slide 26: Performance Summary for Q1 FY21
Performance Summary for Q1 FY21 1. Focus on growth ➢ Overall Closing AUM ↑ 8% from Rs 2,02,396 Crore in Mar’20 to Rs. 2,17,643 Crore in Jun’20 ➢ Closing Equity AUM ↑ 19% from Rs 65,697 Crore in Mar’20 to Rs. 78,017 Crore in Jun’20 ➢ Maintained leadership in fixed income category (ex-Liquid) with clo
Slide 27: Focus on growth
Focus on growth Figures in Rs Crore Overall Average Assets under Management Domestic Closing Assets under Management Strong retail franchise with investor folio count at ~7.2 Mn Overall ↑ 8% Q-o-Q | Equity ↑ 19% Q-o-Q 2,70,360 2,62,723 2,17,643 6,646 2,25,714 5,952 2,02,396 3,663 1,61,491 1,39,626 1
Slide 28: Continued traction in Retail, B-30 and SIPs
Continued traction in Retail, B-30 and SIPs Figures in Rs Crore Retail + HNI AAUM at Rs 1+ Lakh Crore (45.7% of overall AAUM) SIP Mix % to Closing 38.4% 41.0% Retail + HNI AAUM1 Overall ↑ 4% Q-o-Q | Retail ↑ 12% Q-o-Q Equity AuM 31,962 SIP AUM 98,791 1,02,706 25,250 58,888 HNI 59,674 Retail 39,117 4
Slide 29: Large and diversified distribution network
Large and diversified distribution network Continue to grow IFA share in equity sourcing Investor Education and Distributor development 13% 13% 12% Bank • Conducted innovative campaigns and services with the objective of spreading 20% awareness among investors and providing support to business partn
Slide 30: Leveraging technology
Leveraging technology Technology initiatives + Digital Assets deployed Outcomes Onboarding Pre-purchase journey Digital Transactions % Customer Interactions on digital channels ➢ Acquired 50,000 Investors through our Video ➢ Investor Portal powered by Hyper 94% KYC platform during CoVID lockdown per
Slide 31: Digital Platforms
Digital Platforms Customer Partner mf.adityabirlacapital.com abslmfpartner.adityabirlacapital.com Mobile Apps Mobile App & API services for IFAs Reference link for prefilled ARN hard coded pre-filled transactions experience Transaction Link for Partners Aditya Birla Capital Limited 31
Slide 32: Key Financials – Aditya Birla Sun Life AMC Limited
Key Financials – Aditya Birla Sun Life AMC Limited Figures in Rs Crore Quarter 1 Quarter 4 Quarter 1 Key Performance Parameters FY 19-20 FY 19-20 FY 20-21 (PY) (PY) (CY) Domestic AAUM 2,53,965 2,47,522 2,14,592 Domestic Equity AAUM 92,474 87,685 72,478 Alternate and Offshore Equity AAUM 9,749 9,249
Slide 33: Aditya Birla Sun Life Insurance Limited
Aditya Birla Sun Life Insurance Limited 33
Slide 34: Performance Summary for Q1 FY21
Performance Summary for Q1 FY21 1. Strong rebound in New Business Premium Under Lockdown ➢ Individual FYP ↑ 5% y-o-y in Q1 FY21 (Industry ↓ 23% y-o-y) ➢ Group NBP grew 3x y-o-y in Q1 FY21 (Industry ↓ 20% y-o-y) 2. Strong focus on digital enablement ➢ >3.5Lacs customers engaged digitally with ~10% bu
Slide 35: Strong rebound in New Business Premium under lockdown
Strong rebound in New Business Premium under lockdown Figures in Rs Crore Strong rebound in Individual FYP1 Group New Business Premium 5 % Y-o-Y in Q1 FY21 Y-o-Y Growth ~3x | 2Y CAGR ~22% Top 5 Pvt2 -26% Industry2 -23% Industry2 -20% 589 294 309 393 227 188 Q1 FY19 Q1 FY20 Q1 FY21 Q1 FY19 Q1 FY20 Q1
Slide 36: Leveraging technology
Leveraging technology Figures in Rs Crore Technology initiatives + Digital Assets deployed Outcomes Pre-Purchase Onboarding Digital Onboarding Distributor Portal ➢ 3.5 Lacs customers engaged digitally across • 96% New business sourced digitally InstaVerify adoption at 30%+ 80% platforms 75% 96% 65%
Slide 37: Multi channel distribution strategy
Multi channel distribution strategy Figures in Rs Crore Sourcing Mix Channel Wise Highlights Partnerships Proprietary Partnership Channel Proprietary Channel 179 35% 148 147 50% 130 58% Ind. FYP 65% 50% 42% Q1 FY20 Q1 FY21 Q1 FY20 Q1 FY21 Q1 FY19 Q1 FY20 Q1 FY21 3% 4% 12% 13% Top Quartile in Product
Slide 38: Focus on value accretive product mix
Focus on value accretive product mix Figures in Rs Crore Improvement in Product Mix New Products and Processes 9% 8% 7% ▪ New Product Launches Protection ➢ New Product Child Plan launched on Non-Participating Platform 30% 35% Non-Par ➢ New Riders launched for ULIP products to improve overall 48% Par
Slide 39: Improving Quality of Business
Improving Quality of Business Figures in Rs Crore Renewal Premium Persistency1 Controlled Opex2 Y-o-Y Growth ~3% | 2Y CAGR ~11% Improving Persistency Trends y-o-y Reduction in opex to premium ratio 81% Q1 FY20 Q1 FY21 79% 751 773 291 276 625 251 66%66% 60% 57% 54% 49% 47% 46% 19.8% 23.1% 16.3% Q1 FY
Slide 40: Improvement in VNB Margins
Improvement in VNB Margins Figures in Rs Crore Gross VNB1 Net VNB2 Closing Gsec 7.9% 6.9% 5.9% Margin 37.2% 34.4% 33.1% 107 105 90 Q1 FY19 Q1 FY20 Q1 FY21 Net VNB better than PY given steady Gross margin maintained despite falling interest rates topline and better expense management Aditya Birla Cap
Slide 41: Key Financials – Aditya Birla Sun Life Insurance Limited
Key Financials – Aditya Birla Sun Life Insurance Limited Figures in Rs Crore Quarter 1 Quarter 4 Quarter 1 Key Performance Parameters FY 19-20 FY 19-20 FY 20-21 (PY) (PY) (CY) Individual First year Premium 322 542 328 Group First year Premium 188 596 589 Renewal Premium 751 1,559 773 Total Gross Pre
Slide 42: Aditya Birla Health Insurance Limited
Aditya Birla Health Insurance Limited 42
Slide 43: Performance Summary for Q1 FY21
Performance Summary for Q1 FY21 1. Fastest growing HI with Q1 GWP growth at 72% vs Industry at 6% (SAHI at 16%) 72% 246 Figures in crores YoY Growth% ➢ Strong retail growth at 95% with Retail GWP mix at 73% (PY: 64%) ABHI→ 72% 143 179 2. Unique & Differentiated “Health First Model” anchored in 92 SA
Slide 44: Unique & Differentiated Health First Model: Core offerings
Unique & Differentiated Health First Model: Core offerings .. 1/2 Large & diversified product suite with health first offerings enabling traditional & non-traditional customer segment acquisition Expanding the Market Product Differentiators Comprehensive Product Range Digital: 1 click product / Byte
Slide 45: Health data based hyper-personalized engagement
Health data based hyper-personalized engagement …2/2 Risk Stratification Interventions Engagement Outcomes1 Health Data Wellness / Value added services through key partners Very High Risk ✓ 2nd opinion Compliance /Health Risk Critical condition Leverage ecosystem for engagement ✓ Health coach / ca
Slide 46: Scaled-up and diversified digitally enabled distribution network
Scaled-up and diversified digitally enabled distribution network Diversified & scaled Diversified distribution and scaled and distribution andprovider provider network network Digitally enabled distribution lifecycle Q1 FY20 Q1 FY21 Digital Agency: Digital Onboarding, training & engagement Branches
Slide 47: Suite of Digital Assets enabling end-to-end digital journeys
Suite of Digital Assets enabling end-to-end digital journeys Investments in Digital assets and end-to-end digitally enabled journeys provided insulation & enabled leverage during lockdown Customer Servicing Assets Digitally enabled Journeys ➢ Self-servicing/tracking in App & WhatsApp ➢ Multi-lingual
Slide 48: Business Outcomes
Business Outcomes Figures in Rs Crore GWP grew 72% y-o-y with 2x retail growth 5 Mn+ through rural & micro/ byte-sized products Retail GWP grew 95% y-o-y (Retail Mix at 73%) Lives Covered (Mn) 3.2x 246 8.9x 8.9 Revenue 143 Retail 179 3.7 76 92 47 1.0 51 67 Group 29 Q1 FY19 Q1 FY20 Q1 FY21 Q1 FY19 Q1
Slide 49: External trends providing tailwinds for continued growth
External trends providing tailwinds for continued growth COVID Impact on Industry & Emerging Trends Leveraging the trends: ABHI’s position of strength Customer Behavior & Our differentiated Health First Model more Channel Mix Product & Digital servicing relevant today and anchored in: Patterns • ↑ t
Slide 50: Key Financials – Aditya Birla Health Insurance Limited
Key Financials – Aditya Birla Health Insurance Limited Figures in Rs Crore Quarter 1 Quarter 4 Quarter 1 Key Performance Parameters1 FY 19-20 FY 19-20 FY 20-21 (PY) (PY) (CY) Retail Premium 92 245 179 Group Premium 51 81 67 Gross Written Premium 143 326 246 Revenue 146 296 203 Combined Ratio 146% 11
Slide 51: Other Financial Services businesses
Other Financial Services businesses
Slide 52: Other Financial Services Businesses
Other Financial Services Businesses Figures in Rs Crore Quarter 1 Quarter 4 Quarter 1 Key Performance Parameters FY 19-20 FY 19-20 FY 20-21 Other Financial Services Businesses1 (PY) (PY) (CY) Aggregate Revenue 186 188 155 Aggregate Profit Before Tax 25 14 41 • Premium placement grew q-o-q by 17% to
Slide 53: Annexure A Consolidated Financials
Annexure A Consolidated Financials
Slide 54: Consolidated Profit & Loss
Consolidated Profit & Loss Figures in Rs Crore Figures in Rs Crore Quarter 1 Quarter 4 Quarter 1 Consolidated Profit & Loss FY 19-20 FY 19-20 FY 20-21 (PY) (PY) (CY) Revenue 3,627 4,817 4,035 Profit Before Tax (before share of profit/(loss) of JVs 378 78 235 Add: Share of Profit/(loss) of associate
Slide 55: A financial services conglomerate meeting the life time needs of its customers
A financial services conglomerate meeting the life time needs of its customers Life Insurance Mutual Funds Home Finance Online Personal Finance Health Insurance Wealth Management Personal Finance Management Motor Insurance Stocks and Securities SME Finance Money for Life Planner Corp General Insuran
Slide 56: Disclaimer
Disclaimer The information contained in this presentation is provided by Aditya Birla Capital Limited (“ABCL or the Company”), formerly known as Aditya Birla Financial Services Limited, to you solely for your reference. Any reference herein to "the Company" shall mean Aditya Birla Capital Limited, t