JM Financial Limited · NSE:JMFINANCIL
JM Financial — Q2 FY19 Earnings Presentation
37 slides from JM Financial's earnings presentation, Oct 25, 2018
Slide 1: Regulation 30 Investors' Presentation Cover Letter
4JM FINANCIAL October 25, 2018 BSE Limited National Stock Exchange of India Limited Department of Corporate Services Exchange Plaza 1st Floor, New Trading Ring Plot No.C-1, G Block Rotunda Building, P J Towers Bandra-Kurla Complex Dalai Street, Fort, Bandra (East) Mumbai 400001 Mumbai — 400 051 Secu
Slide 2: Quarter ended September 30, 2018 – Results update
JM Financial Limited Quarter ended September 30, 2018 – Results update October 25, 2018
Slide 3: Safe Harbour
Safe Harbour This presentation and the following discussion may contain “forward looking statements” by JM Financial Limited (“JM Financial” or “JMFL” or the “Company”) that are not historical in nature. These forward looking statements, which may include statements relating to future results of ope
Slide 4: Key implications on financial statements upon migration to Ind AS
Key implications on financial statements upon migration to Ind AS Under the ECL model, the loan loss provision is made on the basis of the loan book’s historical loss experience Expected Credit and future expected credit loss depending on the credit quality assessment. ECL adjustment has had a negat
Slide 5: Table of Contents
Table of Contents Group Performance Business Performance Group Structure and Shareholding Pattern Group Overview Annexures 4
Slide 6: Key Highlights – Consolidated Performance – Ind AS
Key Highlights – Consolidated Performance – Ind AS Rs. Leverage Revenues PBT Net Profit EPS BVPS ROA* (Debt / (Equity ROE* + Minorities) 976 Cr 380 Cr 163 Cr 1.95 58.63 0.9% 2.61x 3.5% Q2 FY19 27.0% 20.3% 8.2% Q2 FY18 769 Cr 315 Cr 151 Cr 1.90 44.90 1.1% 2.84x 3.7% Rs. Leverage Revenues PBT Net Prof
Slide 7: Consolidated Profit & Loss Statement – Ind AS
Consolidated Profit & Loss Statement – Ind AS Particulars (Rs Cr) Q2FY19 Q2FY18 YoY % Q1 FY19 QoQ % Gross Revenue1 976 769 27.0% 852 14.6% Employee cost 113 100 12.9% 107 6.0% Other expenses 72 58 27.2% 69 5.2% Provisions* 23 13 69.7% 19 15.6% Finance cost 381 276 38.1% 335 14.0% Depreciation 7 6 5.
Slide 8: Consolidated Profit & Loss Statement – Ind AS
Consolidated Profit & Loss Statement – Ind AS Particulars (Rs Cr) H1FY19 H1FY18 YoY % Gross Revenue 1 1,828 1,500 21.9% Employee cost 220 198 11.0% Other expenses 141 124 13.8% Provisions* 42 27 56.7% Finance cost 716 539 32.9% Depreciation 13 13 3.3% PBT 696 600 16.0% Tax Expense2 257 206 24.3% PAT
Slide 9: Reconciliation of Net Profit - IGAAP and Ind AS
Reconciliation of Net Profit - IGAAP and Ind AS Quarter ended Particulars (Rs Cr) 30.09.2018 Unaudited Net profit after tax and before minority interest (IGAAP) 252 Add / (Less): Provision for expected credit Loss (17) Inc / (Dec) in interest income / borrowing cost pursuant to application of effect
Slide 10: Consolidated Balance Sheet – Ind AS
Consolidated Balance Sheet – Ind AS As at As at Particulars (Rs Cr) Sep 30, 2018 Sep 30, 2017** Assets Loan book (Net of Effective Interest Rate & ECL) 16,847 12,175 Loan book (Public issue of NCDs/IPO Financing) 377 1,536 Distressed asset book (Investment in SRs / Loan) 4,501 2,755 Treasury fund 3,
Slide 11: Reconciliation of Net worth - IGAAP and Ind AS
Reconciliation of Net worth - IGAAP and Ind AS As at 30.09.2018 Particulars (Rs Cr) Unaudited Net worth as per the erstwhile Indian GAAP (IGAAP) before minority interest 6,715 Add / (Less): Additional provision for expected credit loss (43) Increase in interest income / borrowing cost pursuant to ap
Slide 12: Lending book Profile – Ind AS
Lending book Profile – Ind AS Gross Loan Book (Rs Cr)# NIM Analysis (%) 17,108 13.9% 16,442 13.3% 13.2% 13.2% 2,520 2,977 12,108 12,365 2,451 2,472 8.8% 9.0% 8.7% 9.0% 1,955 398 2,380 449 7.1% 1,913 2,128 6.1% 6.3% 5.9% 161 201 11,073 11,211 8,078 7,656 Q1 FY18 Q1 FY19 Q2 FY18 Q2 FY19 Q1 FY18 Q1 FY1
Slide 13: Borrowing Profile
Borrowing Profile Consolidated Debt/Equity* : ~2.3x Consolidated Debt/Equity: ~2.6x Consolidated Debt/Equity: ~2.8x October 25, 2018 September 30, 2018** September 30, 2017** 4% 0% Short 4% 0% Short 1% 1% Short Term Term Term Borrowing Breakup 35% 41% 43% 22% 24% 31% 22% 37% 41% Long Long Long Term
Slide 14: Segment-wise Commercial Paper Borrowing and Repayment Capabilities
Segment-wise Commercial Paper Borrowing and Repayment Capabilities¹ Rs. in crore Amount % of CP Particulars (as on 25th Oct, 2018) Assets backing Rs Crore borrowing Investment Banking, Wealth Management and Securities Business Capital Market 1,364 27.4% High quality liquid assets Trading & Broking 5
Slide 15: Table of Contents
Table of Contents Group Performance Business Performance Group Structure and Shareholding Pattern Group Overview Annexures 14
Slide 16: Our Business
Our Business Our Business Segments Investment Banking, Mortgage Distressed Asset Wealth Management & Lending Credit Management Securities Business (IWS) Investment Banking and Wholesale – Developer Asset Reconstruction Mutual Fund Securities Funding Retail - Housing, LAP and Wealth Management EIL* B
Slide 17: Segment Performance – Ind AS
Segment Performance – Ind AS Ind AS Segment revenue (Rs Cr) Q2 FY19 Q1 FY19 QoQ Q2 FY18 YoY IWS* 473 453 4.7% 442 7.4% Mortgage Lending 321 292 9.8% 220 45.7% Distressed Credit 180 103 74.9% 99 82.2% Asset Management 25 26 -2.3% 25 1.7% Others 24 20 22.0% 12 N/M Total Segment Revenue 1,023 894 14.6%
Slide 18: Segment Performance – Ind AS
Segment Performance – Ind AS Ind AS Segment revenue (Rs Cr) H1 FY19 H1 FY18 YoY IWS* 926 852 8.7% Mortgage Lending 613 458 34.0% Distressed Credit 283 180 57.5% Asset Management 51 47 8.9% Others 44 22 N/M Total Segment Revenue 1,916 1,558 23.1% Less: Inter - segmental revenue (88) (58) 51.9% Total
Slide 19: IWS – Key Non Financial Information
IWS – Key Non Financial Information Investment Banking Transactions Securities Business(Rs Cr) Average Daily Turnover (Rs Cr) • Buy side advisor to Reliance Jio Infocomm for acquisition of Fibre assets, Media Convergence Nodes assets and related infrastructure assets from Reliance Communications 4,5
Slide 20: IWS – Key Financial Information
IWS – Key Financial Information PE and RE AUM (Rs Cr) Wealth Management AUM (Rs Cr) Total 802 597 520 495 716 AUM 42,808 43,941 155 155 180 180 155 31,910 31,808 647 27,289 561 417 340 340 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Private Equity (PE) Real Estate
Slide 21: Mortgage Lending
Mortgage Lending Wholesale Retail Loan Book (Rs Cr) • Provides an integrated financial solution to real estate developers with major focus on real estate project financing 8,792 • Home loans business commenced 8,504 • Announced equity fund raise in JM Financial Credit Solutions of operations in Dece
Slide 22: Distressed Credit – Asset Reconstruction
Distressed Credit – Asset Reconstruction Business Overview Long Term Positive Drivers Long Term Credit Rating of AA- and Short Term Credit • Rollout of Corporate Insolvency Resolution Process Rating of A1+ by ICRA & CARE. Comfortable gearing of (CIRP) under Insolvency & Bankruptcy Code 2016 1.68x**
Slide 23: Distressed Credit – Asset Reconstruction (cont’d)
Distressed Credit – Asset Reconstruction (cont’d) AUM (Rs Cr) Asset Acquisitions (Rs Cr) 14,257 1,087 13,294 1,021 12,202 12,469 657 526 339 350 3,212 1,689 2,260 1,747 62 72 Q1 FY18 Q1 FY19 Q2 FY18 Q2 FY19 Q1 FY18 Q1 FY19 Q2 FY18 Q2 FY19 ARC's AUM JM's share in ARC's AUM Assets Acquired by ARC JM's
Slide 24: Asset Management – Mutual Fund
Asset Management – Mutual Fund Asset Management AUM (Rs Cr) Mutual Fund: 16,633 16,365 • Quarterly Average AUM (QAAUM) – Rs 12,672 cr. 13,952 12,073 12,672 • Rank (QAAUM) – 23 among 41 Mutual Funds. 5,174 5,052 6,965 4,233 • Market Share – 0.52%. 4,118 • 15 Schemes categorized as Long Term Debt, Sho
Slide 25: Table of Contents
Table of Contents Group Performance Business Performance Group Structure and Shareholding Pattern Group Overview Annexures 24
Slide 26: Organisational Structure
Organisational Structure JM Financial Limited (1) Investment Banking Management of Private Equity Fund Holding company of other operating subsidiaries 100% 100% 59.54% 99.35% 47.1%(2) 57.07% 100% 100% 100% JM Financial JM Financial Infinite India Overseas JM Financial JM Financial JM Financial JM Fi
Slide 27: Shareholding Summary
Shareholding Summary Share Price Information Market Information (BSE) As on 30.09.2018 200.0 Market Capitalization (Rs Cr) 7,267.31 150.0 Price (Rs) 86.55 100.0 No. of Shares Outstanding (Cr) 83.97 50.0 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 52 Week High-Low (Rs) 190.95-83.75 % Shareholding – September
Slide 28: Table of Contents
Table of Contents Group Performance Business Performance Group Structure and Shareholding Pattern Group Overview Annexures 27
Slide 29: Performance of Select Subsidiaries – IND AS
Performance of Select Subsidiaries – IND AS In Rs Cr JM Financial Credit Solutions Ltd JM Financial Products Ltd Q2 FY19 Q2 FY18 Q2FY19 Q2 FY18 Revenue 320 220 Revenue 246 229 Net Profit 87 71 Net Profit 47 50 Net worth 2,666 1,509 Net worth 1517 1,367 Loan book 8,738 5,708 Loan book 7,826 6,102 Net
Slide 30: Performance of Select Subsidiaries – IND AS
Performance of Select Subsidiaries – IND AS In Rs Cr JM Financial Credit Solutions Ltd JM Financial Products Ltd H1 FY19 H1 FY18 H1 FY19 H1 FY18 Revenue 611 457 Revenue 490 440 Net Profit 170 155 Net Profit 110 99 Net worth 2,666 1,509 Net worth 1,517 1,367 Loan book 8,738 5,708 Loan book 7,826 6,10
Slide 31: Journey of JM Financial Group
Journey of JM Financial Group JM Financial Joint Venture with Morgan Stanley 1973 1986 1994 1998 2003-2004 2005-2006 2006 -2007 2007 Incorporation of JM JM Financial Set up mutual JV with Capital Preferential issue of shares Launched Separated Financial and Limited(1) fund Morgan market to Tiger Glo
Slide 32: Corporate Governance – Strong Board of Directors
Corporate Governance – Strong Board of Directors Mr. Nimesh Kampani, Chairman Mr. Vishal Kampani, Managing Director B. Com, FCA M.com, M. S. (Finance) from London Business School • Founder and Chairman of JM Financial Group, one of India’s • Managing Director of JM Financial Ltd., the group’s flagsh
Slide 33: Effective Risk Management Framework
Effective Risk Management Framework Robust risk management architecture encompassing independent identification, measurement and management of 1 risk across various businesses of the Group 2 Effective systems, processes and adequate review mechanism to actively monitor, manage and mitigate risks 3 Q
Slide 34: CSR – Integrated Rural Transformation Programme
CSR – Integrated Rural Transformation Programme Jamui District, Bihar Project Bachpan – Four learning centers in Sikandra block, Jamui district, complete Education a year of implementation with 100 students’ (3 – 6 years). Of the 100 students, 19 Model Village Development Project initiated in 13 hav
Slide 35: CSR – Strengthening Public Healthcare
CSR – Integrated Rural Transformation Programme First Referral Unit (FRU) Project in Dumri block – FRU saw increased utilization of public health services, with July 1938 cases, Strengthening Public Healthcare Giridih District, Jharkhand Aug 2865 cases and September 3151 cases of OPD – Successful co
Slide 36: JM Financial Foundation – Giving & Ongoing Activities
JM Financial Foundation – Giving & Ongoing Activities Holistic development and aid in the process of adoption of abandoned and destitute children was extended Philanthropic In the field of education, study material and uniforms were supplied to tribal students giving We engaged in social constructiv
Slide 37: For Further Queries
For Further Queries Mr. Manish Sheth Group CFO Email: [email protected] Contact No: 022 66303461 Ms. Karishma Mehta Investor Relations Email: [email protected] Contact No: 022 66303585 Mr. Nishit Shah Business Strategy and Investor Relations Email: [email protected] Contact No: 022 6630