Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Q1 FY18 Earnings Presentation
43 slides from Manappuram Finance's earnings presentation, August 2017
Slide 1: Manappuram Finance Limited Investor Presentation
Manappuram Finance Limited Investor Presentation August 2017 Gold Loans Microfinance Housing Finance Vehicle Finance
Slide 2: Quarterly Update
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 3: Q1 FY18 Results: Consolidated Result Highlights
Q1 FY18 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS AUM Net Profit Networth ROA 4.2% Rs 133,798 Mn Rs 1,551.7 Mn Rs 34,658 Mn ROE 18.2% (+ 2.8% YoY) (-3.2 % YoY) Capital Adequacy * Borrowing Cost * GNPA * BV / Share Rs 41.16 28.1% 9.4% 1.1% EPS Rs 7.37 Share of New Dividend / Share Total Branches No of
Slide 4: Consolidated Profit & Loss Statement
Q1 FY18 RESULTS: CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (Rs Mn) Q1 FY18 Q1 FY17 YOY % Q4 FY17 QOQ % FY17 Closing AUM (Rs Bn) 134 130 2.8% 137 -2.0% 137 Interest income 8,300.3 7,433.4 11.7% 8,958.8 -7.4% 33,762.5 Other Operating Income 31.6 27.9 13.5% 29.2 8.5% 114.5 Income from Operations
Slide 5: Consolidated Balance Sheet
Q1 FY18 RESULTS: CONSOLIDATED BALANCE SHEET Particulars (Rs Mn) Jun 2017 Jun 2016 YOY % Mar 2017 QOQ % Cash & Bank Balances 4,608.0 7,696.5 -40.1% 5,137.5 -10.3% Investments 50.5 50.6 -0.2% 50.5 0.0% Loans & Advances 134,497.4 129,638.1 3.7% 138,543.6 -2.9% Fixed Assets 1,830.2 1,921.3 -4.7% 1,869.5
Slide 6: Consolidated Result Highlights
Q1 FY18 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS CONSOLIDATED AUM (Rs Bn) NET PROFIT (Rs Mn) CAGR: 18.7 % CAGR: 49.6 % 137 145 146 137 134 7,559 114 96 82 3,534 2,260 2,713 2,025 2,006 1,924 1,552 FY14 FY15 FY16 FY17 Q2 Q3 Q4 Q1 FY14 FY15 FY16 FY17 Q2 Q3 Q4 Q1 FY17 FY17 FY17 FY18 FY17 FY17 FY17 FY18
Slide 7: Consolidated Result Highlights: Networth, EPS, Dividend
Q1 FY18 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS NETWORTH (Rs Mn) BOOK VALUE PER SHARE (Rs) 33,618 33,618 34,658 30,602 32,106 39.9 38.2 39.9 41.2 27,580 36.4 24,918 26,328 31.3 32.8 29.6 FY14 FY15 FY16 FY17 Q2 Q3 Q4 Q1 FY14 FY15 FY16 FY17 Q2 Q3 Q4 Q1 FY17 FY17 FY17 FY18 FY17 FY17 FY17 FY18 EARNINGS
Slide 8: Consolidated AUM Update
Q1 FY18 RESULTS: CONSOLIDATED AUM UPDATE CONSOLIDATED AUM (Rs Mn) Particulars (Rs Mn) FY14 FY15 FY16 FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Gold Loans 81,552.4 92,244.8 100,806.0 111,245.3 123,827.0 122,672.0 111,245.3 107,273.1 Microfinance 0.0 3,220.0 9,988.0 17,959.4 15,705.0 16,504.0 17,959.4 18,271.2
Slide 9: Manappuram Finance: Borrowing Profile
Q1 FY18 RESULTS: MANAPPURAM FINANCE: BORROWING PROFILE BORROWING AS ON JUNE, 2017 = Rs 86,512 Mn CREDIT RATING Commercial Paper Manappuram Finance: 32.3% Investment grade rating since 1995 Long Term: AA- (Stable) by CRISIL, ICRA, CARE Long Term: AA (Stable) by Bricwork Subordinated Bond Short Term:
Slide 10: Manappuram Finance: Result Analysis
Q1 FY18 RESULTS: MANAPPURAM FINANCE: RESULT ANALYSIS GOLD LOAN AUM (Rs Bn) GOLD LOAN DISBURSEMENTS (Rs Bn) 525 CAGR: 10.9 % 124 123 111 111 107 361 92 101 82 245 203 149 121 123 127 FY14 FY15 FY16 FY17 Q2 Q3 Q4 Q1 FY14 FY15 FY16 FY17 Q2 Q3 Q4 Q1 FY17 FY17 FY17 FY18 FY17 FY17 FY17 FY18 OPEX TO AUM %
Slide 11: Manappuram Finance: Result Analysis
Q1 FY18 RESULTS: MANAPPURAM FINANCE: RESULT ANALYSIS NETWORTH (Rs Mn) NPA ANALYSIS % * 33,108 33,108 34,474 30,152 31,529 2.3% 27,368 2.0% 2.0% 24,918 26,274 1.2% 1.2% 1.0% 1.1% 0.9% 2.0% 1.7% 1.7% 1.0% 1.0% 0.9% 0.7% 0.7% FY14 FY15 FY16 FY17 Q2 Q3 Q4 Q1 FY14 FY15 FY16 FY17 Q2 Q3 Q4 Q1 FY17 FY17 FY1
Slide 12: Manappuram Finance: Gold AUM Update
Q1 FY18 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE PAN INDIA PRESENCE GOLD AUM - REGIONWISE BREAKUP Jammu & Kashmir, 13 Himachal Pradesh, 6 10% Chandigarh, 4 Delhi, 59 16% Uttarakhand, 5 63% Punjab, 75 11% Uttar Pradesh, 105 Haryana, 62 Assam, 8 Bihar, 12 Rajasthan, 78 Tripura, 2 South North West
Slide 13: Manappuram Finance: Gold AUM Update
Q1 FY18 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE GOLD HOLDING (TONNES) GOLD AUM PER BRANCH (Rs Mn) 65.9 65.1 37.6 59.6 61.1 61.1 59.4 37.3 53.1 33.8 33.8 32.6 30.6 45.6 28.0 24.8 FY14 FY15 FY16 FY17 Q2 Q3 Q4 Q1 FY14 FY15 FY16 FY17 Q2 Q3 Q4 Q1 FY17 FY17 FY17 FY18 FY17 FY17 FY17 FY18 CUSTOMER BASE
Slide 14: Asirvad Microfinance: Key Highlights
Q1 FY18 RESULTS: ASIRVAD MICROFINANCE: KEY HIGHLIGHTS Particulars (Rs Mn) Q1 FY18 Q1 FY17 YOY % Q4 FY17 QOQ % FY17 Closing AUM 18,271.2 12,368.0 47.7% 17,959.3 1.7% 17,959.4 Interest income 917.5 586.3 56.5% 897.7 2.2% 3,059.2 Other Operating Income 65.4 71.5 -8.5% 73.1 -10.5% 369.0 Income from Oper
Slide 15: Asirvad Microfinance: Result Analysis
Q1 FY18 RESULTS: ASIRVAD MICROFINANCE: RESULT ANALYSIS AUM (Rs Mn) RETURN RATIOS % 22.0% 21.8% CAGR: 136 % 17,959 14.6% 14.1% 13.9% 17,959 18,271 15,705 16,504 3.6% 3.4% 2.5% 4.0% 3.5% -1.7% -6.9% 9,988 FY15 FY16 FY17 Q2 Q3 -11.1% Q4 Q1 FY17 FY17 FY17 FY18 3,220 FY15 FY16 FY17 Q2 Q3 Q4 Q1 -55.3% FY1
Slide 16: Asirvad Microfinance: AUM Update
Q1 FY18 RESULTS: ASIRVAD MICROFINANCE: AUM UPDATE PAN INDIA PRESENCE MFI AUM - REGIONWISE BREAKUP Uttarakhand, 5 18% Chandigarh, 1 9% Uttar Pradesh, 67 Punjab, 20 11% 62% Bihar, 44 Haryana, 27 West Bengal, 78 Rajasthan, 21 South North West East Jharkhand, 45 Tripura, 3 Madhya Chattisgarh, 34 Pradesh
Slide 17: Housing Finance: Business Update
Q1 FY18 RESULTS: HOUSING FINANCE: BUSINESS UPDATE AFFORDABLE HOUSING HOUSING FINANCE METRICS AUM (Rs Mn) – June 2017 3,198 ▪ 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 Ind
Slide 18: Vehicle Finance: Business Update
Q1 FY18 RESULTS: VEHICLE FINANCE: BUSINESS UPDATE VEHICLE FINANCE VEHICLE FINANCE METRICS ▪ Started commercial operations in January 2015. AUM (Rs Mn) – June 2017 3,437 ▪ The operations are a part of Manappuram Finance Ltd and are Branch Network 67 carried out from existing gold loan branches 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: Experienced Management Team
COMPANY OVERVIEW: EXPERIENCED MANAGEMENT TEAM Mr. V. P. Nandakumar Mr. B.N. Raveendra Babu Mr. Kapil Krishan Managing Director & CEO Executive Director Group Chief Financial Officer ▪ 27 years experience with ▪ Chief Promoter of ▪ Director since July 1992 organizations such as Manappuram Group ▪ Wor
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 Mr. Rajiven V. R. • He holds a Bachelor of Science degree and has completed his LLB from Govt. Law College, Trivandrum INDEPENDENT & • Shri Rajiven brings to the Board a wealth of experience in areas like Leadership and Staff managem
Slide 25: Shareholding Structure
COMPANY OVERVIEW: SHAREHOLDING STRUCTURE Share Price Performance MARKET DATA AS ON 08.08.2017 120 83,380 Market Capitalization (Rs Mn) 100 Price (Rs) 98.80 80 No. of Shares Outstanding (Mn) 841.9 60 Face Value (Rs) 2.0 40 Avg. Trading Volume (Rs Mn) 420 Avg. Trading Volume (Mn shares) 4.3 20 52 Week
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: 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 28.1% compared to the BASE minimum 15% as stipulated by the RBI. MICROFINANCE PAN INDIA DISTRIB
Slide 31: Key Technology Initiatives
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 32: Exploring New Age Gold Loan Based Fintech Opportunities
KEY TECHNOLOGY INITIATIVES: EXPLORING NEW AGE GOLD LOAN BASED FINTECH BUSINESS OPPORTUNITIES INNOVATE (STRATEGIC) Out of the box innovative projects to make us ready and relevant to face future challenges / changes. E.g. - OGL,SGL, Mobility platforms, OGL Credit eWallet, Net Lockers etc. DIFFERENTIA
Slide 33: Gold Loans – IT/Fintech Business Strategy
KEY TECHNOLOGY INITIATIVES: EXPLORING NEW AGE GOLD LOAN BASED FINTECH BUSINESS OPPORTUNITIES GOLD LOANS - IT/FINTECH BUSINESS STRATEGY B2C Self Service Platforms: WEB APPLICATION • Online gold Loan and e-commerce based credit ecosystem, and SGL (SMS based Gold Loan) facility for customers who find i
Slide 34: Technological Innovations to Enhance Value Proposition
KEY TECHNOLOGY INITIATIVES: TECHOLOGICAL INNOVATIONS TO ENHANCE VALUE PROPOSITION CENTRALIZED IOT BASED KEYLESS ELOCKERS TIE-UP WITH E-COMMERCE PLATFORMS FOCUS ON BRAND POSITIONING, IMPROVED COLLECTION, EFFECTIVE LEAD GENERATION, SUPERIOR CUSTOMER EXPERIENCE, OPEX COST REDUCTION 34
Slide 35: Implementation of New Technologies
KEY TECHNOLOGY INITIATIVES: IMPLEMENTATION OF NEW TECHNOLOGIES - STAYING AHEAD OF THE CURVE MAJOR BUSINESS DIFFERENTIATORS COMPLETED RECENTLY TIE-UP WITH PAYTM, M- I-REFER MOBILE AUTOMATIC IMPS / NEFT / BC TIE-UP WITH YES ONLINE INWARD PESA, M-RUPEE, ITZCASH APPLICATION RTGS GOLD LOAN BANK FOR DOMES
Slide 36: Annexure
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 37: 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 38: 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 39: 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 75 per cent - 100 92 101 100 82 ▪ Resulting into Level Playing Field for NBFCs vis-a-vis the commercial banks . 50 J
Slide 40: 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 41: 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 42: 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 43: 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 Mr. Kapil Krishan herein