Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Q2 FY19 Earnings Presentation
42 slides from Manappuram Finance's earnings presentation, November 2018
Slide 1: Manappuram Finance Limited Investor Presentation
Manappuram Finance Limited Investor Presentation November 2018 Gold Loans Microfinance Housing Finance Vehicle Finance
Slide 2: Quarterly Update
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 3: Q2 FY19 Results: Consolidated Result Highlights
Q2 FY19 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS AUM Net Profit Rs 171,907 Mn Rs 2,214.0 Mn Networth ROA 4.8% (+ 3.4% QoQ) (11.4 % QoQ) Rs 41,434.9 Mn ROE 21.8% (+25% YoY) (+40% YoY) Capital Adequacy * Borrowing Cost * GNPA * BV / Share Rs 49.16 26.0% 8.88% 0.7% EPS Rs 10.51 Share of New Dividend / S
Slide 4: Key Performance Highlights
Q2 FY19 RESULTS: KEY PERFORMANCE HIGHLIGHTS • Continued robust volume growth with 2.1% QoQ tonnage growth ; AUM growth at +1% QoQ . YoY growth in tonnage / AUM was strong at +12.7% / +17% Gold Loans • Improvement in gold loan net yields by +80 bps QoQ on account of reduction in interest waivers on o
Slide 5: Consolidated Profit & Loss Statement
Q2 FY19 RESULTS: CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (Rs Mn) H1FY19 H1FY18 YOY% Q2 FY19 Q2 FY18 YOY % Q1 FY19 QOQ % FY18* Closing AUM (Rs Bn) 172 137 25.3% 172 137 25.3% 166 3.4% 158 Income from Operations 19,502.6 16,632.5 17.3% 10,144.4 8,318.7 21.9% 9,358.2 8.4% 34,233.6 Finance expe
Slide 6: Consolidated Result Highlights
Q2 FY19 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS CONSOLIDATED AUM (Rs Bn) NET PROFIT (Rs Mn) CAGR: 13.2 % 166 172 CAGR: 25.4 % 158 147 158 137 7,559 114 6,709 96 3,534 2,713 2,214 1,733 1,822 1,988 FY15 FY16 FY17 FY18 Q3 Q4 Q1 Q2 FY15 FY16 FY17 FY18 Q3 Q4 Q1 Q2 FY18 FY18 FY19 FY19 FY18 FY18 FY19 FY19
Slide 7: Consolidated Result Highlights
Q2 FY19 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS NETWORTH (Rs Mn) BOOK VALUE PER SHARE (Rs) 38,363 36,989 38,363 39,860 41,435 47.3 49.2 33,618 45.5 43.9 45.5 39.9 26,328 27,580 31.3 32.8 FY15 FY16 FY17 FY18 Q3 Q4 Q1 Q2 FY15 FY16 FY17 FY18 Q3 Q4 Q1 Q2 FY18 FY18 FY19 FY19 FY18 FY18 FY19 FY19 EARNINGS
Slide 8: Consolidated AUM Update
Q2 FY19 RESULTS: CONSOLIDATED AUM UPDATE CONSOLIDATED AUM (Rs Mn) Particulars (Rs Mn) FY15 FY16 FY17 FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Gold Loans 92,244.8 100,806.0 111,245.3 117,349.8 113,270.8 117,349.8 124,650.0 125,927.6 Microfinance 3,220.0 9,988.0 17,959.4 24,372.0 21,116.5 24,372.0 24,379.4 27
Slide 9: Manappuram Finance: Borrowing Profile
Q2 FY19 RESULTS: MANAPPURAM FINANCE: BORROWING PROFILE BORROWING AS ON Sep, 2018 = Rs 113,537 Mn CREDIT RATING Manappuram Finance: Commercial Paper Long Term: AA- (Positive) by CRISIL 25.6% Long Term: AA- (Stable) by ICRA Long Term: AA+ (Stable) by Bricwork Subordinate Long Term: AA (Stable) by CARE
Slide 10: Manappuram Finance: Result Analysis
Q2 FY19 RESULTS: MANAPPURAM FINANCE: RESULT ANALYSIS GOLD LOAN AUM (Rs Bn) OPEX TO AUM % 8.9% 9.2% CAGR: 6.2 % 8.1% 8.6% 8.4% 8.3% 126 7.6% 117 117 125 7.0% 111 113 92 101 FY15 FY16 FY17 FY18 Q3 Q4 Q1 Q2 FY15 FY16 FY17 FY18 Q3 Q4 Q1 Q2 FY18 FY18 FY19 FY19 FY18 FY18 FY19 FY19 NET PROFIT (Rs Mn) 7,260
Slide 11: Manappuram Finance: Result Analysis
Q2 FY19 RESULTS: MANAPPURAM FINANCE: RESULT ANALYSIS NETWORTH (Rs Mn) NPA ANALYSIS % 38,145 36,897 38,145 39,385 40,839 33,108 2.0% 26,274 27,368 1.2% 1.0% 0.7% 0.7% 0.7% 0.6% 0.7% 1.7% 1.0% 0.7% 0.3% 0.4% 0.3% 0.3% 0.2% FY15 FY16 FY17 FY18 Q3 Q4 Q1 Q2 FY15 FY16 FY17 FY18 Q3 Q4 Q1 Q2 FY18 FY18 FY19
Slide 12: Manappuram Finance: Gold AUM Update
Q2 FY19 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE PAN INDIA PRESENCE GOLD AUM - REGIONWISE BREAKUP Jammu & Kashmir, 10 Himachal Pradesh, 6 11% Chandigarh, 4 Delhi, 59 17% 59% Uttarakhand, 5 Punjab, 75 Uttar Pradesh, 120 13% Haryana, 62 Assam, 17 Bihar, 19 Rajasthan, 79 Tripura, 2 South North West
Slide 13: Manappuram Finance: Gold AUM Update
Q2 FY19 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE GOLD HOLDING (TONNES) GOLD AUM PER BRANCH (Rs Mn) 64.0 64.0 66.0 66.0 67.4 59.6 61.1 37.4 37.8 33.8 35.3 34.1 35.3 53.1 30.6 28.0 FY15 FY16 FY17 FY18 Q4 Q1 Q1 Q2 FY15 FY16 FY17 FY18 Q3 Q4 Q1 Q2 FY18 FY19 FY19 FY19 FY18 FY18 FY19 FY19 CUSTOMER BASE
Slide 14: Asirvad Microfinance: Key Highlights
Q2 FY19 RESULTS: ASIRVAD MICROFINANCE: KEY HIGHLIGHTS Particulars (Rs Mn) H1FY19 H1FY18 YOY% Q2 FY19 Q2 FY18 YOY % Q1 FY19 QOQ % *FY18 Closing AUM 27,289.4 19,645.8 38.9% 27,289.4 19,645.8 38.9% 24,379.4 11.9% 24,372.0 Income from Operations 2,860.9 2,003.2 42.8% 1,475.4 1,016.7 45.1% 1,385.4 6.5% 4
Slide 15: Asirvad Microfinance: Result Analysis
Q2 FY19 RESULTS: ASIRVAD MICROFINANCE: RESULT ANALYSIS AUM (Rs Mn) RETURN RATIOS % CAGR: 65.8 % 27,289 27.8% 24,372 24,372 24,379 33.5% 21,117 20.2% 17,959 14.6% 14.1% 13.9% 0.6% 2.3% 4.6% 4.2% 9,988 3.6% 3.4% -1.4% 3,220 0.1% 2.5% -11.7% FY15 FY16 FY17 FY18 Q3 Q4 Q1 Q2 FY15 FY16 FY17 FY18 Q3 Q4 Q1
Slide 16: Asirvad Microfinance: AUM Update
Q2 FY19 RESULTS: ASIRVAD MICROFINANCE: AUM UPDATE PAN INDIA PRESENCE MFI AUM - REGIONWISE BREAKUP Uttarakhand, 5 30% Chandigarh, 1 46% Uttar Pradesh, 64 Sikkim, 2 Punjab, 21 Bihar, 63 13% Assam, 9 11% Haryana, 27 West Bengal, 90 Rajasthan, 38 South North West East Jharkhand, 43 Gujarat, 9 Tripura, 1
Slide 17: Housing Finance: Business Update
Q2 FY19 RESULTS: HOUSING FINANCE: BUSINESS UPDATE AFFORDABLE HOUSING HOUSING FINANCE METRICS AUM (Rs Mn) – Sep 2018 4,477.9 Started commercial operations in January 2015. Branch Network 35 Focus on Affordable Housing for Mid to Low income Group. Number of States 6 Focus on South and West of In
Slide 18: Vehicle and Equipment Finance: Business Update
Q2 FY19 RESULTS: VEHICLE AND EQUIPMENT FINANCE: BUSINESS UPDATE VEHICLE AND EQUIPMENT FINANCE VEHICLE AND EQUIPMENT FINANCE METRICS AUM (Rs Mn) – Sep 2018 8,172.3 Started commercial operations in January 2015. Branch Network 145 The operations are a part of Manappuram Finance Ltd and are Number
Slide 19: Company Overview
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 20: Company Overview: Brief Profile
COMPANY OVERVIEW: BRIEF PROFILE STRONG Incorporated in 1992, the company has been one of India’s leading gold loans NBFCs. PEDIGREE Promoted by Mr. V.P. Nandakumar (current MD & CEO) whose family has been involved in gold loans since 1949. Focus on utilising surplus capital to build or acquire
Slide 21: Company Overview: Strong Brand Recall
COMPANY OVERVIEW: STRONG BRAND RECALL Strong brand equity built over the years. Celebrity endorsements have led to enhanced visibility and growing business. Brand ‘Manappuram’ is endorsed by well recognized film industry icons across India . Our brand ambassadors - Venkatesh, Mohan Lal, Pune
Slide 22: Company Overview: Experienced Management Team
COMPANY OVERVIEW: EXPERIENCED MANAGEMENT TEAM Mr. V. P. Nandakumar Mr. B.N. Raveendra Babu Mrs. Bindu A L Managing Director & CEO Executive Director EVP – Finance & Accounts Chief Promoter of Director since July 1992 Chartered Accountant with Manappuram Group Worked in a senior role with Ove
Slide 23: Corporate Governance – Strong Board of Directors
COMPANY OVERVIEW: CORPORATE GOVERNANCE – STRONG BOARD OF DIRECTORS Mr. Jagdish Capoor • Former Chairman of HDFC Bank, former Deputy Governor of Reserve Bank of India, former Chairman of UTI and BSE Ltd CHAIRMAN, INDEPENDENT & • Currently, he is on the Board of Indian Hotels Company Limited, Assets C
Slide 24: Corporate Governance – Strong Board of Directors
COMPANY OVERVIEW: CORPORATE GOVERNANCE – STRONG BOARD OF DIRECTORS • Bachelor of Science from Mumbai University, Masters in Biochemistry from GS Medical College, Mumbai. Dr. Amla Samanta • She is Managing Director of Samanta Organics Pvt Ltd, Tarapur & Ashish Rang Udyog Pvt Ltd. INDEPENDENT & NON-EX
Slide 25: Company Overview: Shareholding Structure
COMPANY OVERVIEW: SHAREHOLDING STRUCTURE Share Price Performance MARKET DATA AS ON 04.11.2018 140 69,954 Market Capitalization (Rs Mn) 130 120 Price (Rs) 83.0 110 No. of Shares Outstanding (Mn) 843 100 90 Face Value (Rs) 2.0 80 Avg. Qtrly Trading Volume (Rs Mn) 358 70 60 Avg. Qtrly Trading Volume (M
Slide 26: Business Strategy
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 27: Business Strategy: Key Highlights
BUSINESS STRATEGY: KEY HIGHLIGHTS BUSINESS STRATEGY STRENGTHEN THE ADDITION OF SYNERGISTIC CORE GOLD LOAN BUSINESS NEW BUSINESS SEGMENTS • De-Linking the Gold Business • Leveraging the Strong Brand Equity & Existing from Gold Prices Retail Customer Base • Focus on Branch Activations through increase
Slide 28: Business Strategy: De-linking Gold Business from Gold Prices
BUSINESS STRATEGY: DE-LINKING GOLD BUSINESS FROM GOLD PRICES Earlier Scenario – Additional 2 month for 12 months – Single Product Offering 12 month Long Tenure Product Auction Gold value 100 LTV 75% If the Customer does not Gold Loan 75 pay or close the Loan, then there is likely loss of Interest Ra
Slide 29: Gold Loan Business – Reaching Out to the Customer
BUSINESS STRATEGY: GOLD LOAN BUSINESS – REACHING OUT TO THE CUSTOMER Increased Significantly Initiative to track marketing enhanced our Increased branch level initiatives across marketing spend incentives and performance branches and key with growing BTL branch activations scorecard markets and ATL
Slide 30: Introducing New Synergistic Product Segments
BUSINESS STRATEGY: INTRODUCING NEW SYNERGISTIC PRODUCT SEGMENTS STRONG BRAND EQUITY CAPITAL AVAILABILITY ADDITION ON NEW SYNERGISTIC Current Capital Adequacy at EXISTING RETAIL CUSTOMER PRODUCT SEGMENTS 25.9 % compared to the BASE minimum 15% as stipulated by the RBI. MICROFINANCE PAN INDIA DISTRI
Slide 31: Key Technology Initiatives
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 32: Exploring New Age Fintech Business Opportunities
KEY TECHNOLOGY INITIATIVES: EXPLORING NEW AGE FINTECH BUSINESS OPPORTUNITIES INNOVATE (STRATEGIC) DIFFERENTIATE (TACTICAL) Out of the box innovative projects to make Business differentiators like CRM, MDM us ready and relevant to face future challenges UPI, eSign, AEPS, eNACH & Chatbots, / Changes.
Slide 33: Innovative Business Propositions
KEY TECHNOLOGY INITIATIVES: INNOVATIVE BUSINESS PROPOSITIONS • Offline Apps: B2C & B2B Apps that can work Offline without internet connectivity Apps • Mobility Apps : Restructured Apps that can work without any device, browser, platform dependency • OGL Digital Cards & Wallets : This may open up VAS
Slide 34: Implementation of New Technologies - Staying Ahead of the Curve
KEY TECHNOLOGY INITIATIVES: IMPLEMENTATION OF NEW TECHNOLOGIES - STAYING AHEAD OF THE CURVE (a) Employee punching (b) CRM (a) App supports for end to end EKYC & (a) Solution for Customer 360 Litigatio Additional authentication for management of Litigation AEPS view (b) Lead Management n App Gold Loa
Slide 35: Annexure
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 36: Understanding Our Evolution Phase 1: FY08 - FY12
UNDERSTANDING OUR EVOLUTION PHASE 1: FY08 - FY12 STRONG GROWTH WITNESSED…. 2908 3000 Higher Loan To Value (LTV) up to 85% 150 2064 116 Lower Cost of Funds due to Eligibility under Priority Sector 2250 100 Lending 75 1500 1005 Supported by Buoyant Economic Growth 50 645 436 750 Long Tenure Pr
Slide 37: Understanding Our Evolution Phase 2: FY12 - FY14
UNDERSTANDING OUR EVOLUTION PHASE 2: FY12 - FY14 REGULATORY OVERHANG IMPACT…. Regulatory Changes by RBI- 140 Mar - 2012 : Removal of Priority Sector Lending Status 120 116 100 – led to Higher Borrowing Cost. 100 75 82 80 60 Mar - 2012 : Cap on LTV to not exceed more than 60% 40 - 20 0 Weakened
Slide 38: Understanding Our Evolution Phase 3: FY15 Onwards
UNDERSTANDING OUR EVOLUTION PHASE 3: FY15 ONWARDS ON A REVIVAL PATH….. Sept – 2013 : Regulatory Changes by RBI- 150 Increased the loan-to-value (LTV) ratio for gold loans to 116 111 117 75 per cent - 100 92 101 100 82 Resulting into Level Playing Field for NBFCs vis-a-vis the commercial banks .
Slide 39: Industry Overview: India Gold Market
INDUSTRY OVERVIEW: INDIA GOLD MARKET India possesses over ~20,000 tonnes of gold worth more than US$ 800 bn. Organized gold loan sector penetration is Just 3% ! India is the largest consumer of gold jewellery in the world - Together with China, it makes up over half the global consumer demand for
Slide 40: Industry Overview: Key Drivers for Gold Loan Market
INDUSTRY OVERVIEW: KEY DRIVERS FOR GOLD LOAN MARKET ADVANTAGE CONSUMER ADVANTAGE LENDER Idle gold can be monetized for productive purposes. Collateral / Security is with the lender – No requirement to reposes. Prompt Disbursement - Faster turnaround time. No Liquidity Issues – Gold is one of
Slide 41: Industry Overview: Competitive Advantage - Gold Loan NBFCs
INDUSTRY OVERVIEW: COMPETITIVE ADVANTAGE - GOLD LOAN NBFC’S Parameter Gold loan NBFC's Banks Moneylenders LTV Up to 75% Lower LTV than NBFC's Higher than 75% Processing charges are much Processing Fees No / Minimal Processing Fees No Processing Fees higher compared to NBFC's Usually in the range of
Slide 42: For Further Queries
FOR FURTHER QUERIES: DISCLAIMER : This presentation and the contents therein are for information purposes only and does not and should not construed to be any investment or legal advice. Any action taken or transaction pursued based on the basis of the information contained Mrs. Bindu A. L herein is