Manappuram Finance Limited Investor Presentation February 2019 - PowerPoint PPT Presentation

Manappuram Finance Limited Investor Presentation February 2019 Gold Loans Microfinance Housing Finance Vehicle Finance

Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure

Q3 FY19 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS AUM Net Profit Rs 177,831 Mn Rs 2,441.1 Mn Networth ROA 5.2% (+ 3.4% QoQ) (10.3 % QoQ) Rs 43,415.2 Mn ROE 23.02% (+21 % YoY) (+42% YoY) Capital Adequacy * Borrowing Cost * GNPA * BV / Share Rs 51.5 26.3% 9.37% 0.58% EPS Rs 11.60 Share of New Dividend / Share Businesses Total Branches No of Live Customers Q3FY19: Rs 0.55 29.5% 4.12 mn 4,314 FY18: Rs 2.00 (+ 280 bps QoQ) (+ 690 bps YoY) AUM: Assets Under Management, Net Profit: PAT after Minority Interest * Calculated on standalone basis 3

Q3 FY19 RESULTS: KEY PERFORMANCE HIGHLIGHTS • Delivered strong performance with +21.4% YoY and +3.4% QoQ consolidated AUM growth Overall • Maintained robust profitability 5.2% consolidated ROA, 23% consolidated ROE resulting in +42.1% YoY and +10.3% QoQ Highlights consolidated Net Income growth • Standalone GNPA has declined to 0.6% in Q3 FY19 (vs. 0.7% in Q2 FY19 and Q3 FY18) • Gold Loan AUM up by 10.6% Y-Y and down by 0.5% Q-Q % in Q3 FY19 (vs. QoQ AUM growth of 2% in Q2 FY19) Gold Loan • Organized gold loans market is growing at ~10-12% p.a.; Gold loan growth for the Company in Q3 FY19 was impacted by seasonal Growth lumpiness in gold loans market, Gaja cyclone and changes in certain operational processes • Outlook for gold loans continues to remain robust and Company expects to grow gold loans in line with market growth Gold Loan • Improvement in net yields is due to (i) full quarter impact of withdrawal of discount schemes in the last quarter, and (ii) yield Yields optimization to pass on the increase in cost of funds • Operating leverage has started to play out in the business, in line with guidance a few quarters ago Operating • Security costs have halved from INR 44 Cr in Q3 FY18 to INR 22 Cr in Q3 FY19; Overall growth in operating expenses +6.3% YoY on a leverage standalone basis in Q3 FY19 trails standalone AUM growth +16.5% YoY in Q3 FY19; As a result, C/I ratio in the standalone business has improved from 36.8% in Q3 FY18 to 32.9% in Q3 FY19 • Q3 FY19 was the first quarter when all of the lending products reported profits on a standalone basis • Delivered robust growth in each business, along with stable or improving asset quality across businesses; Asirvad and Insurance Progress on broking businesses have performed particularly well Business • Asirvad continues to report strong turnaround in performance +51.3 % YoY AUM growth, 29.4% ROE in Q3 FY19 Diversificatio – Made significant investments in technology, operations, team and controls, resulting in improvement in business risk profile n – Asirvad MFI is now among the lowest cost providers of microfinance loans in India – Plans to raise funds from PE to achieve targeted growth in the business • Well matched ALM profile; Did not face any significant liquidity stress during Q3 FY19 Liabilities • Diversified sources of funds ; Undrawn Banking lines Rs 19,240 Mn 4

Q3 FY19 RESULTS: STRONG UPTREND IN AUM GROWTH & PROFITABILITY TOTAL AUM (Rs Bn) 178 172 166 158 147 146 137 137 134 Q3 FY17 Q4 FY18 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 NET PROFIT (Rs Mn) 2,444 2,214 2,025 2,006 1,988 1,822 1,733 1,604 1,552 Q3 FY17 Q4 FY18 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 5

Q3 FY19 RESULTS: CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (Rs Mn) 9M FY19 9M FY18 YOY% Q3 FY19 Q3 FY18 YOY % Q2 FY19 QOQ % FY18* Closing AUM (Rs Bn) 178 147 21.4% 178 147 21.4% 172 3.4% 158 Income from Operations 30,314.6 25,339.9 19.6% 10,812.0 8,720.0 24.0% 10,144.4 6.6% 34,233.6 Finance expenses 9,656.5 7,627.1 26.6% 3,540.1 2,599.4 36.2% 3,173.2 11.6% 10,276.6 Net interest income 20,658.1 17,712.9 16.6% 7,271.9 6,120.6 18.8% 6,971.2 4.3% 23,956.9 Employee expenses 5,270.6 4,623.2 14.0% 1,799.6 1,619.5 11.1% 1,772.9 1.5% 6,167.1 Other operating expenses 4,952.3 4,541.4 9.0% 1,702.7 1,571.0 8.4% 1,667.5 2.1% 6,050.2 Pre provision profit 10,435.2 8,548.3 22.1% 3,769.7 2,930.1 28.7% 3,530.7 6.8% 11,739.6 Provisions/Bad debts 404.2 1,374.9 -70.6% 87.4 371.9 -76.5% 162.2 -46.1% 2,101.5 Other Income 440.6 439.9 0.2% 196.1 95.5 105.4% 130.8 50.0% 532.0 Profit before Tax 10,471.6 7,613.3 37.5% 3,878.4 2,653.6 46.2% 3,499.3 10.8% 10,170.1 Tax 3,760.1 2,654.6 41.6% 1,406.9 941.4 49.4% 1,259.3 11.7% 3,486.0 PAT before OCI 6,711.5 4,958.6 35.3% 2,471.6 1,712.2 44.4% 2,240.0 10.3% 6,684.1 Other Comprehensive (12.4) (4.8) 159.4% (10.0) 6.8 -247.8% (8.0) 100.0% NA Income Total Comprehensive Income 6,699.1 4,953.9 35.2% 2,461.6 1,719.0 43.2% 2,232.0 10.3% NA Minority Interest 56.3 (19.7) -386.0% 20.5 1.7 1108.6% 18.1 13.0% (24.9) PAT 6,642.8 4,973.5 33.6% 2,441.1 1,717.3 42.2% 2,213.9 10.3% 6,709.0 *FY18 numbers are as per IGAAP 6

Q3 FY19 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS CONSOLIDATED AUM (Rs Bn) NET PROFIT (Rs Mn) 178 172 CAGR: 13.2 % 166 CAGR: 25.4 % 158 158 137 7,559 6,709 114 96 3,534 2,713 2,441 2,214 1,988 1,822 FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY18 FY19 FY19 FY19 FY18 FY19 FY19 FY19 RETURN RATIOS % TOTAL CUSTOMER BASE (Mn) 4.1 4.0 3.9 3.8 3.8 24.7% 23.0% 3.4 21.8% 20.3% 19.3% 17.8% 2.6 12.8% 1.8 10.6% 5.4% 5.2% 4.8% 4.4% 4.5% 4.0% 3.0% 2.4% FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY18 FY19 FY19 FY19 FY18 FY19 FY19 FY19 ROA % ROE % Q1 FY19 , Q2 FY19 and Q3 FY19 numbers are as per IND AS 7

Q3 FY19 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS NETWORTH (Rs Mn) BOOK VALUE PER SHARE (Rs) 43,415 41,435 51.5 39,860 49.2 38,363 38,363 47.3 45.5 45.5 33,618 39.9 27,580 32.8 31.3 26,328 FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY18 FY19 FY19 FY19 FY18 FY19 FY19 FY19 EARNINGS PER SHARE (Rs) DIVIDEND PER SHARE (Rs) 11.6 10.5 9.4 9.0 8.7 2.0 2.0 8.0 1.8 1.8 4.2 3.2 0.55 0.55 0.55 0.5 FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY18 FY19 FY19 FY19 FY18 FY19 FY19 FY19 Q1 FY19 , Q2 FY19 and Q3 FY19 numbers are as per IND AS 8

Q3 FY19 RESULTS: CONSOLIDATED AUM UPDATE CONSOLIDATED AUM (Rs Mn) Particulars (Rs Mn) FY15 FY16 FY17 FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 117,349.8 117,349.8 124,650.0 125,927.6 125,249.1 111,245.3 Gold Loans 92,244.8 100,806.0 24,372.0 24,372.0 24,379.4 27,289.4 31,951.6 Microfinance 17,959.4 3,220.0 9,988.0 3,746.6 3,746.6 4,065.1 4,477.9 4,780.0 Housing Finance 3,104.1 21.9 1,286.0 6,253.8 6,253.8 7,192.8 8,172.3 9,755.4 Vehicle Finance 153.7 1,297.7 3,058.3 5,925.2 5,925.2 5,903.5 6,039.9 6,094.9 Other Loans 295.0 952.0 1,204.8 157,647.5 157,647.5 166,190.8 171,907.2 177,830.6 Total 95,935.4 114,329.7 136,572.0 SHARE OF NEW BUSINESSES IN CONSOLIDATED AUM 29.6% 26.7% 25.5% 25.5% 25.0% 19.0% 11.8% 3.9% FY15 FY16 FY17 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 9

Q3 FY19 RESULTS: MANAPPURAM FINANCE: BORROWING PROFILE BORROWING AS ON DEC, 2018 = Rs 113,899 Mn CREDIT RATING Manappuram Finance: Commercial Term Loan Long Term: AA- (Positive) by CRISIL Paper from Banks Long Term: AA- (Stable) by ICRA 25.6% & Fis Long Term: AA+ (Stable) by Bricwork 8.7% Long Term: AA (Stable) by CARE Short Term: A1+ by CARE Others Commercial Paper : A1+ by CRISIL,CARE 0.3% Asirvad Microfinance: Long Term: A+ (Positive) by CRISIL, WCDL & Long Term : A+ (Stable) by CARE NCD Cash Credit Short Term: A1+ by CRISIL 16.1% from Banks Housing Finance: 49.3% Long Term: A+ (Positive) by CRISIL Short Term: A1+ by CRISIL Long Term: AA- (Stable) by CARE COST OF BORROWING % MARGINAL COST OF BORROWING 9.75% 9.37% 10.1% 9.9% 9.7% 9.4% 8.9% 8.8% 8.7% 8.6% Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q3 FY19 FY17 FY17 FY17 FY18 FY18 FY19 FY19 FY19 Weighted Average COB Incremental COB 10

Q3 FY19 RESULTS: MANAPPURAM FINANCE: RESULT ANALYSIS OPEX TO AUM % GOLD LOAN AUM (Rs Bn) 8.9% 8.6% 8.4% 8.3% 8.4% 8.1% CAGR: 6.2 % 7.6% 7.0% 126 125 125 117 117 111 101 92 FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY18 FY19 FY19 FY19 FY18 FY19 FY19 FY19 NET PROFIT (Rs Mn) 7,260 7,002 3,372 2,707 2,108 1,928 1,695 1,716 FY15 FY16 FY17 FY18 Q4 Q1 Q2 Q3 FY18 FY19 FY19 FY19 Q1 FY19 , Q2 FY19 and Q3 FY19 numbers are as per IND AS 11