Mmfsl invester-ppt
- 1. Mahindra & Mahindra Financial Services Limited FY 2017 Result Update March - 2017 Regd. Office: Gateway Building, Apollo Bunder, Mumbai 400 001 India Tel: +91 22 2289 5500 Fax: +91 22 2287 5485 www.mahindrafinance.com CIN - L65921MH1991PLC059642 1 Corporate Office: Mahindra Towers, 4th Floor, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 66526000 Fax: +91 22 24953608 Email: Investorhelpline_mmfsl@mahindra.com
- 2. 2 2 Transforming rural lives across the country Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies
- 3. 3 3 Company Background Parentage: Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 785 billion)*, India‟s largest tractor and utility vehicle manufacturer About MMFSL: MMFSL (Mcap: Rs 195 billion)*, one of India‟s leading non-banking finance companies focused in the rural and semi-urban sector is the largest Indian tractor financier Key Business Area: Primarily in the business of financing purchase of new and pre-owned auto and utility vehicles, tractors, cars, commercial vehicles, construction equipments and SME Financing Vision: MMFSL‟s vision is to be a leading provider of financial services in the rural and semi-urban areas of India Reach: Has 1182 offices covering 27 states and 4 union territories in India, with over 4.71 million vehicle finance customer contracts since inception Credit Ratings: India Ratings has assigned AAA(ind)/Stable, CARE Ratings has assigned AAA/Stable, Brickwork has assigned AAA/Stable and CRISIL has assigned AA+/Stable rating to the Company‟s long term and subordinated debt *Source: Market capitalisation as of April 24, 2017 from BSE website
- 4. 4 4 MMFSL Group structure 85% (1) 87.5%(2) 100% 51.20% 49% Mahindra Insurance Brokers Limited (“MIBL”) Mahindra Rural Housing Finance Limited (“MRHFL”) Mahindra Finance USA LLC (Joint venture with Rabobank group subsidiary) Mahindra & Mahindra Financial Services Limited Mahindra Asset Management Company Pvt. Ltd 100% Mahindra Trustee Company Pvt. Ltd Mahindra & Mahindra Limited Note: 1. Balance 15% with Inclusion Resources Pvt. Ltd.,a subsidiary of Leapfrog Financial Inclusion Fund, incorporated in Singapore. 2. Balance 12.5% with National Housing Bank (NHB)
- 5. 5 5 Our Journey FY 06 FY 16 FY 15 FY 13 FY 11 FY 09 FY 08 Completed IPO, Subscribed ~ 27 times Commenced housing finance business through MRHFL Raised Rs. 4.14 Bn through Private Equity Equity participation of 12.5%by NHB in MRHFL Recommenced Fixed Deposit Program Maiden QIP Issue of Rs. 4.26 Bn JV with Rabobank subsidiary for tractor financing in USA Stake sale in MIBL to Inclusion Resources Pvt. Ltd. QIP Issue of Rs. 8.67 Bn Long term debt rating upgraded to AAA by India Ratings and Brickwork. CARE Ratings assigned AAA rating to long term debt Reach extended to over 1100 offices Crossed 4 million cumulative customer contracts Certificate of Registration received from SEBI by Mahindra Mutual Fund FY 10 Crossed 1 million cumulative customer contracts FY 17 Maiden Retail NCD Issue of Rs. 1000 crores. Oversubscribed over 7 times over base issue size of Rs. 250 crores
- 6. 6 6 Shareholding Pattern (as on 31st March 2017) Top 10 Public Shareholders Franklin Templeton Investment Funds Aranda Investments (Mauritius) Pte Ltd Valiant Mauritius Partners Offshore Limited Amansa Holdings Private Limited Life Insurance Corporation Of India Bank Muscat India Fund Valiant Mauritius Partners Limited Vanguard Emerging Markets Stock Index Fund Merrill Lynch Markets Singapore Pte. Ltd. HDFC Standard Life Insurance Company Shareholding Pattern Chart 51.9% 30.4% 11.8% 5.9% Promoters* FIIs Mutual Funds and DIIs Non Institutions * Mahindra & Mahindra Limited holds a stake of 51.2% in the Company. ESOP trust holds the balance 0.7%
- 7. 7 7 Transforming rural lives across the country Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies
- 8. 8 Auto Industry: Long term growth potential With 18 cars per 1000 people (FY 2016), on account of strong long term growth prospects penetration is expected to increase to 27 cars per 1000 people (FY 2020) As more households come under the addressable market, sales of small cars are likely to increase 9-11% CAGR from 2015-16 to 2020-21. CRISIL Research expects sedan sales to rise 5-7% CAGR and utility vehicle (UV) sales 12-14%. Source: *CRISIL Research, Cars & UV – January 2017 18 39 93 147 196 270 294 385 476 500 526 588 India China Thailand Brazil Mexico Russia S. Korea USA Japan UK Germany Italy Global Comparison in terms of PV per thousand people Addressable HHs to increase over the next 5 years 240 262 285 41 68 132 14 21 35 0 50 100 150 200 250 300 2010-11E 2015-16E 2020-21P Total Households Addressable Household Total PV Population (Mn)
- 9. 9 Passenger Vehicles Industry: Overall Demand Drivers Source: CRISIL Research, Cars & UV – January 2017 Rising proportion of rural sales with increase in proportion of first time buyers will drive small cars and UV growth in long term Lower penetration, improving incomes, range bound crude prices to push long term demand FY 06 – FY11 FY 11 – FY 16 FY 16 – FY 21 (P) Small Cars 14% 2% 9% – 11% Sedans 11% (1%) 5% – 7% UV + Vans 13% 6% 12% – 14% Total (Cars + UVs) 13% 2% 9% – 11% Volumes in „000 FY 2015 FY 2016 FY 2017 (E) FY 2018 (P) Volume Growth Volume Growth Growth Growth Small Cars 1,620 8% 1,754 8% 6% – 8% 7% – 9% Sedans 256 (11%) 271 6% (3%) – (5%) 2% – 4% UV + Vans 725 1% 763 5% 18% – 20% 7% – 9% Total (Cars + UVs) 2,601 4% 2,788 7% 9% – 11% 7% – 9% Low single digit growth expected in larger vehicles - Impact of infrastructure cess and ban on diesel vehicles (over 2000 cc) in the Capital Higher farm incomes, pick up in infrastructure spending and a normal monsoon will boost rural demand Implementation of 7th pay commission to support sale of small cars. GST and 7th pay commission would also strengthen 2017-18 demand
- 10. 10 Commercial Vehicles Industry: Overall Demand Drivers Source: CRISIL Research, Commercial Vehicles – February 2017 FY 11 – FY 16 FY 16 – FY 21 MHCV (goods) (1%) 5% - 7% LCV (goods) 1% 11% - 14% Buses 0% 8% - 10% FY 2015 FY 2016 FY 2017 (E) FY 2018 (P) Volume Growth Volume Growth Growth Growth MHCV 195,903 21% 258,510 32% (2%) - 0% (4%) – (2%) LCV 337,653 (13%) 332,773 (1%) 6% - 8% 5% – 7% Buses 81,653 0% 92,845 14% 8% - 10% 7% – 9% Growth to be witnessed as industrial activity improves, agricultural output steadies and infrastructure projects receive focus Demand for LCVs fuelled by increase of hub-and-spoke model, growth of organised retail, rising consumption expenditure and improvement in rural road infrastructure Under the MHCV segment, ICV and multi-axle vehicles to grow share at cost of ICVs LCV industry poised to see improved growth in FY 17 after 2 consecutive years of negative/ poor growth driven by better private consumption and rural demand
- 11. 11 Tractors Industry: Overall Demand Drivers Industry - Tractors FY 2015 FY 2016 FY 2017 FY 2018 (P) FY 16 – FY 21 (P) Volume Growth Volume Growth Volume Growth Growth Growth Tractors 551,463 (13%) 493,764 (10%) 582,844 18% 8% - 10% 9% - 11% Source: Tractor Industry: CRISIL Research, Tractors – January 2017 13% 10% 18% 20% 7% 0% 1% -1% 4% -1% 9%-11% 5%-7% 14%-16% 5%-7% 14%-16% -5% 0% 5% 10% 15% 20% 25% India North West East South FY06-FY11 CAGR FY11-FY16 CAGR FY16-FY21 CAGR
- 12. 12 Source: Crisil Domestic Sales (Volume in „000) FY17 (Nos.) FY16 (Nos.) Y-o-Y Growth (%) FY15 (Nos.) Passenger Vehicles (PVs) Passenger Cars / Vans 2,103 2,025 3.9% 1,877 UVs 944 764 23.6% 723 Commercial Vehicles (CVs) M&HCVs 302 302 0.0% 232 LCVs 412 383 7.6% 382 Three Wheelers 512 538 (4.8%) 532 Tractors 583 494 18.0% 551 Auto Industry Volume
- 13. 13 By FY 2021, penetration levels are expected to increase to 79% for cars and 76% for utility vehicles from 77% and 71% respectively (FY 2017E) as a result of a moderation in interest rates and better availability of credit information Increase of finance penetration in cities (excluding top 20) are going to contribute in the overall growth Loan-to-value (LTVs) expected to increase marginally to 77% for cars and 74% for UVs from 76% and 72% respectively over the next 5 years Source: CRISIL Research, Retail Finance - Auto, February 2017 Automobile Finance Market: 5 years Projected Growth @16-18% Growth in New Vehicle Finance Disbursements (% growth YoY) FY12E FY13E FY14E FY15E FY16E FY17E FY18P 5 year CAGR (FY21P) Cars 8% (7%) (6%) 3% 17% 12% 13% 15% - 17% Utility Vehicles 16% 39% (6%) 1% 16% 32% 22% 22% - 24% Commercial Vehicles 17% (14%) (24%) 9% 23% 9% 12% 17% - 18% Two Wheelers 27% 10% 16% 4% 7% 18% 18% - 19% 10% - 12% Car & UV Loan Portfolio Top 20 Cities Other Cities Outstanding Loan Composition 55% - 60% 40% - 45% Finance Penetration Ratio 80.0% 65.0%
- 14. 14 10% 17% 20% 33% 38% 40% 42% 42% 53% 68% 75% 114% 0% 20% 40% 60% 80% 100% 120% India China Thailand Korea Malaysia Taiwan Hong Kong Germany Singapore USA UK Denmark Source: Crisil Retail Finance – Housing – December 2016 Mortgage Penetration (as % of GDP) Long term growth to remain intact as the real estate industry becomes more transparent, affordability improves, prices stabilize in major markets and interest rate decline under MCLR regime. Disbursements to grow @ 18% - 19% CAGR over FY 19 - 21 on the back of higher finance penetration, demand for affordable housing and increasing urbanisation Mid size and Small HFC‟s would maintain spread supported by presence in niche rural markets Mortgage penetration in India is 9-11 years behind other regional emerging markets like China and Thailand Though India‟s mortgage-to-GDP ratio is low at 10% in 2015-16, it has improved by 300-400 bps over the last six years. The increase was led by rising incomes, improving affordability, growing urbanisation, emergence of Tier-II and Tier-III cities, tax incentives Housing Finance Growth 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2003-04 E 2006-07 E 2010-11 E 2014-15 E 2015-16 E 2020-21 F Banks HFCs 522 Growth in Housing Finance Disbursements 866 1,748 3,413 3,991 9,000 E: Estimated F: Forecasted Rs. Bn.
- 15. 15 15 Transforming rural lives across the country Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies
- 16. 16 Business Strategy Grow in rural and semi urban markets for vehicle and automobile financing Diversify Product Portfolio Continuing to attract, train and retain talented employees Effective use of technology to improve productivity Broad base Liability Mix Leverage the “Mahindra” Ecosystem Leverage existing customers base through Direct Marketing Initiatives Expand Branch Network
- 17. 17 Extensive branch network with presence in 27 states and 4 union territories in India through 1182 offices Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of 1 11 35 28 19 30 18 106 73 97 72 103 36 62 63 2 94 78 21 21 45 3 63 4 3 34 JK PB HP UC HR Delhi UP RAJ GUJ MAH MP CH GOA KK KER TN Port Blair AP OR JH BH WB AS Sikkim Megh Tripura Mizoram 1 58 TS 256 436 547 893 1108 1167 1182 Mar'05 Mar'08 Mar'11 Mar'14 Mar'15 Mar'16 Mar'17 Extensive Branch Network 1 Pondicherry
- 18. 18 Loans for auto and utility vehicles, tractors, cars, commercial vehicles and construction equipments Vehicle Financing Pre-Owned Vehicles Mutual Fund Distribution Loans for pre-owned cars, multi-utility vehicles, tractors and commercial vehicles Advises clients on investing money through AMFI certified professionals under the brand “MAHINDRA FINANCE FINSMART” SME Financing Loans for varied purposes like project finance, equipment finance and working capital finance Personal Loans Offers personal loans typically for weddings, children‟s education, medical treatment and working capital Insurance Broking Housing Finance Insurance solutions to retail customers as well as corporations through our subsidiary MIBL Loans for buying, renovating, extending and improving homes in rural and semi-urban India through our subsidiary MRHFL Diversified Product Portfolio Mutual Fund & AMC Asset Management Company/ Investment Manager to „Mahindra Mutual Fund‟, which received certificate of registration from SEBI
- 19. 19 Asset Class Year ended March – 17 Year ended March – 16 Year ended March – 15 Auto/ Utility vehicles 28% 30% 33% Tractors 17% 15% 18% Cars 22% 22% 22% Commercial vehicles and Construction equipments 12% 11% 9% Pre-owned vehicles 14% 16% 15% SME and Others 7% 6% 3% Break down of estimated value of Assets Financed * Standalone
- 20. 20 Asset Class As on March – 17 As on March – 16 As on March – 15 Auto/ Utility vehicles 30% 31% 31% Tractors 17% 17% 18% Cars 23% 24% 23% Commercial vehicles and Construction equipments 13% 12% 13% Pre-owned vehicles 9% 10% 10% SME and Others 8%* 6% 5% As on 31st Mar 17, ~48% of the AUM was from M&M assets * Share of SME: 5% Break down of AUM * Standalone
- 21. 21 Break down by Geography * Standalone Central 10% East 21% North 27% South 21% West 21% Loan Assets as on March 2017 Central 10% East 21% North 29% South 21% West 19% Disbursement for FY 2017 NORTH: Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Rajasthan, Uttar Pradesh, Uttaranchal; EAST: Assam, Bihar, Jharkhand, Meghalaya, Mizoram, Orissa, Sikkim, Tripura, West Bengal; WEST: Dadra and Nagar Haveli, Gujarat, Maharashtra, Goa; CENTRAL: Chhattisgarh, Madhya Pradesh; SOUTH: Andaman and Nicobar Island, Andhra Pradesh, Karnataka, Kerala, Pondicherry, Tamil Nadu, Telangana;
- 22. 22 MMFSL believes that its credit rating and strong brand equity enables it to borrow funds at competitive rates Long term and Subordinated debt Short term debt Long term and Subordinated debt Fixed Deposit Programme Long term and Subordinated debt; Bank Facilities IND AAA Stable India Ratings Outlook Brickwork Outlook BWR AAA Stable FAAA Stable CRISIL Outlook CRISIL AA+ Stable CRISIL A1+ -- Credit Rating Long term and Subordinated debt CARE Ratings Outlook CARE AAA Stable Short term debt IND A1+ -- Credit Rating
- 23. 23 Funding Mix by Investor profile (Mar’ 17) Funding Mix by type of Instrument (Mar’ 17) Investor Type Amount (INR mn.) % Share Banks 163,705 46% Mutual Fund 75,082 21% Insurance & Pension Funds 27,647 8% FIIs & Corporates 42,901 12% Others 45,572 13% Total 354,907 100% Instrument Type Amount (INR mn.) % Share NCDs 153,912 44% Retail NCDs 10,000 3% Bank Loans 96,892 27% Fixed Deposits 43,830 12% CP, ICD 42,070 12% Securitisation/ Assignment 8,203 2% Total 354,907 100% Broad Based Liability Mix Working Capital Consortium Facility enhanced to Rs. 20,000 mn. comprising several banks
- 24. 24 All our offices are connected to the centralised data centre in Mumbai through Lease line/HHD Through hand held devices connected by GPRS to the central server, we transfer data which provides – Prompt intimation by SMS to customers – Complete information to handle customer queries with transaction security – On-line collection of MIS on management‟s dashboard – Recording customer commitments – Enables better internal checks & controls Technology initiatives Training programs for employees on regular basis 5 days induction program on product knowledge, business processes and aptitude training Mahindra Finance Academy training programs for prospective and existing employees at 5 locations Assessment & Development Centre for promising employees Employee recognition programs such as – Dhruv Tara, Annual Convention Award and Achievement Box Participation in Mahindra Group‟s Talent Management and Retention program Employee engagement & training Employee Management and Technology Initiatives
- 25. 25 25 Transforming rural lives across the country Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies
- 26. 26 Rs 2,341 mn Rs 3,703 mn 37% Total Income Profit after Tax Value of Asset Financed Rs 83,764 mn Rs 68,107 mn 23% Rs 18,427 mn Rs 16,897 mn 9% Key Financials Q4 FY 17 Q4 FY 16 Figures on standalone basis Rs 4,002mn Rs 6,726 mn 40% Rs 316,591 mn Rs 267,063 mn 19% Rs 62,375 mn Rs 59,051 mn 6% FY 17 FY 16 * Please refer to detailed note on Slide 45 on Provisioning Policy
- 27. 27 49.53 55.85 59.05 62.38 FY14 FY15 FY16 FY17 8.87 8.32 6.73 4.00 FY14 FY15 FY16 FY17 89.6 99.7 107.0 113.9 FY14 FY15 FY16 FY17 Note : (1) PAT post exceptional items. (2) Calculated as Shareholders funds/ Number of shares. 296.17 329.33 366.62 425.23 FY14 FY15 FY16 FY17 Growth Trajectory Figures on standalone basis Loan Book (Rs. Bn) Revenues (Rs. Bn) Book Value Per Share (2) (Rs.) Profit after Tax (1) (Rs. Bn)
- 28. 28 Note : (1) Cost to Income calculated as Operating Expenses (including depreciation)/(Net Interest Income + Other Income). (2) Calculated based on average total assets Financial Performance Figures on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) Return on Net Worth (RONW) (%) 3.2% 2.5% 1.8% 1.0% FY14 FY15 FY16 FY17 4.4% 5.9% 8.0% 9.0% 1.9% 2.4% 3.2% 3.6% FY14 FY15 FY16 FY17 Gross NPA Net NPA Asset Quality 18.6% 15.5% 11.4% 6.4% FY14 FY15 FY16 FY17 59.0 % 61.0% 61.7% 61.8% Provision Coverage Ratio 33.0% 32.6% 36.1% 42.9% FY14 FY15 FY16 FY17
- 29. 29 Particulars (Rs. in Million) Q4FY17 Q3FY17 Q-o-Q Q4FY16 Y-o-Y Revenue from operations 18,255 14,904 22.5% 16,721 9.2% Less: Finance cost 7,138 7,441 (4.1%) 6,711 6.4% NII 11,117 7,463 49.0% 10,010 11.1% Other Income 172 130 32.7% 176 (2.0%) Total Income 11,289 7,593 48.7% 10,186 10.8% Employee benefits expense 1,797 1,627 10.4% 1,556 15.5% Provisions and write Offs 3,614 4,190 (13.7%) 1,089 231.9% Other expenses 2,105 1,907 10.4% 1,730 21.7% Depreciation and amortization 135 111 22.0% 105 29.0% Total Expenses 7,651 7,835 (2.3%) 4,480 70.8% Profit before tax 3,638 (241) - 5,706 (36.2%) Tax expense 1,297 (85) - 2,003 (35.2%) Net Profit after Taxes 2,341 (156) - 3,703 (36.8%) Standalone Profit & Loss Account * Please refer to detailed note on Slide 45 on Provisioning Policy
- 30. 30 Particulars (Rs. in Million) FY 17 FY 16 Y-o-Y FY 15 Revenue from operations 61,739 58,532 5.5% 55,361 Less: Finance cost 28,574 26,393 8.3% 24,967 NII 33,165 32,139 3.2% 30,394 Other Income 636 519 22.6% 486 Total Income 33,801 32,658 3.5% 30,880 Employee benefits expense 6,809 5,588 21.8% 4,591 Provisions and write Offs 13,091 10,495 24.7% 8,275 Other expenses 7,240 5,784 25.2% 5,062 Depreciation and amortization 460 409 12.5% 415 Total Expenses 27,600 22,276 23.9% 18,343 Profit before tax 6,201 10,382 (40.3%) 12,537 Tax expense 2,199 3,656 (40.0%) 4,219 Net Profit after Taxes 4,002 6,726 (40.5%) 8,318 Standalone Profit & Loss Account * Please refer to detailed note on Slide 45 on Provisioning Policy
- 31. 31 Particulars (Rs. in Million) As on Mar 31, 2017 As on Mar 31, 2016 As on Mar 31, 2015 EQUITY AND LIABILITIES Shareholders' funds a) Share Capital 1,130 1,129 1,128 b) Reserves and Surplus 63,642 59,752 55,566 Shareholders' funds 64,772 60,881 56,694 Non-current liabilities a) Long-term borrowings 214,537 173,317 1,47,871 b) Other Long-term liabilities 4,274 4,326 3,025 c) Long term provisions 5,489 4,482 3,280 Non-current liabilities 224,300 182,125 1,54,176 Current liabilities a) Short Term Borrowings 58,648 43,469 48,710 b) Trade payables 6,630 4,789 4,779 c) Other current liabilities 89,335 89,462 74,876 d) Short term provisions 16,167 15,069 11,506 Current liabilities 170,780 152,789 1,39,871 Total Equities and Liabilities 459,852 395,795 3,50,741 Standalone Balance Sheet
- 32. 32 Particulars (Rs. in Million) As on Mar 31, 2017 As on Mar 31, 2016 As on Mar 31, 2015 ASSETS Non-current assets a) Fixed Assets 1,120 1,135 1,100 b) Non-current investments 13,117 9,923 7,599 c) Deferred tax assets (Net) 7,317 5,853 4,153 d) Long-term loans and advances 222,599 185,265 1,70,697 e) Other non-current assets 1,122 518 2,320 Non-current assets 245,275 202,694 1,85,869 Current assets a) Current investments 5,778 4,910 937 b) Trade receivables 58 51 57 c) Cash and cash equivalents 5,780 5,852 4,759 d) Short-term loans and advances 202,635 181,351 1,58,636 e) Other current assets 326 937 483 Current assets 214,577 193,101 1,64,872 Total Assets 459,852 395,795 3,50,741 Standalone Balance Sheet (Contd.) * Figures re-grouped where found relevant
- 33. 33 Particulars (Rs. in Million) Year ended March - 17 Year ended March - 16 Year ended March - 15 Revenue from operations 71,462 65,539 60,211 Other income 545 436 398 Total Revenue 72,007 65,975 60,609 Expenses: Employee benefits expense 8,866 7,041 5,671 Finance costs 31,862 28,683 26,430 Depreciation and amortization expense 537 457 455 Provisions and write Offs* 13,896 10,982 8,491 Other expenses 8,468 6,571 5,563 Total Expenses 63,629 53,734 46,610 Profit before tax 8,378 12,241 13,999 Tax expense 3,081 4,367 4,750 Profit after tax 5,297 7,874 9,249 Minority Interest 181 151 120 Net Profit after Taxes and Minority Interest 5,116 7,723 9,129 Consolidated Profit & Loss Account * Please refer to detailed note on Slide 45 on Provisioning Policy
- 34. 34 Particulars (Rs. in Million) As on Mar 31, 2017 As on Mar 31, 2016 As on Mar 31, 2015 EQUITY AND LIABILITIES Shareholders' funds a) Share Capital 1,130 1,129 1,128 b) Reserves and Surplus 68,472 63,565 58,299 Shareholders' funds 69,602 64,694 59,427 Minority Interest 998 675 493 Non-current liabilities a) Long-term borrowings 249,849 203,412 1,68,652 b) Other Long-term liabilities 4,274 4,327 3,025 c) Long term provisions 6,217 4,917 3,527 Non-current liabilities 260,340 212,656 1,75,204 Current liabilities a) Short Term Borrowings 72,176 52,175 52,586 b) Trade payables 6,944 4,964 4,954 c) Other current liabilities 106,821 99,211 81,823 d) Short term provisions 17,185 15,693 11,844 Current liabilities 203,126 172,043 1,51,207 Total Equities and Liabilities 534,066 450,068 3,86,331 Consolidated Balance Sheet * Figures re-grouped where found relevant
- 35. 35 Particulars (Rs. in Million) As on Mar 31, 2017 As on Mar 31, 2016 As on Mar 31, 2015 ASSETS Non-current assets a) Fixed Assets 1,345 1,291 1,192 b) Non-current investments 7,979 6,522 5,597 c) Deferred tax assets (Net) 7,572 5,992 4,212 d) Long-term loans and advances 281,753 229,464 1,98,883 e) Other non current assets 1,128 524 2,326 Non-current assets 299,777 243,793 2,12,210 Current assets a) Current investments 5,924 5,467 945 b) Trade receivables 230 200 145 c) Cash and cash equivalents 6,039 6,059 4,936 d) Short-term loans and advances 221,766 193,664 1,67,620 e) Other current assets 330 885 475 Current assets 234,289 206,275 1,74,121 Total Assets 534,066 450,068 3,86,331 Consolidated Balance Sheet (Contd.) * Figures re-grouped where found relevant
- 36. 36 Particulars (Rs. in Million) Year ended March - 17 Year ended March - 16 Year ended March - 15 RONW (Avg. Net Worth) 6.4% 11.4% 15.5% Debt / Equity 5.35:1 4.84:1 4.63:1 Capital Adequacy* 17.6% 17.3% 18.3% Tier I 13.2% 14.6% 15.5% Tier II 4.4% 2.7% 2.8% EPS (Basic) (Rs.) 7.09 11.92 14.75 Book Value (Rs.) 113.9 107.0 99.7 Dividend 120% 200% 200% Assets Under Management (Rs. Mn) 467,755 409,333 368,780 New Contracts During the period (Nos) 556,122 522,256 515,654 No. of employees 17,856 15,821 14,197 Figures on standalone basis Summary & Key Ratios *Note: The Capital Adequacy has been determined without considering dividend for FY 2017 (as per applicable accounting standards). The comparable number post considering dividend shall be 17.2% (Tier I - 12.8%, and Tier II - 4.4%)
- 37. 37 Particulars (Rs. in Million) Year ended March - 17 Year ended March - 16 Year ended March - 15 Total Income / Average Assets 15.2% 16.3% 17.1% Interest / Average Assets 7.0% 7.3% 7.7% Gross Spread 8.2% 9.0% 9.4% Overheads / Average Assets 3.5% 3.2% 3.1% Write offs & NPA provisions / Average Assets 3.2% 2.9% 2.5% Net Spread 1.5% 2.9% 3.8% Net Spread after Tax 1.0% 1.8% 2.5% Spread Analysis Figures on standalone basis
- 38. 38 Particulars (Rs. in Million) As on Mar 31, 2017 As on Mar 31, 2016 As on Mar 31, 2015 Gross Non - Performing Assets* 41,827 32,242 20,997 Less: NPA Provisions 25,830 19,891 12,815 Net Non – Performing Assets 15,997 12,351 8,182 Total Assets (Incl. NPA Provision) 466,338 400,764 353,895 Gross NPA to Total Assets(%) 9.0% 8.0% 5.9% Net NPA to Total Assets(%) 3.6% 3.2% 2.4% Coverage Ratio(%) 61.8% 61.7% 61.0% Count of NPA & Repossessed Stock Contracts under NPA 138,357 109,106 68,459 % of Live Cases under NPA 7.2% 6.0% 4.0% Repossessed Assets (out of above NPA) 13,185 6,358 7,092 Above workings are excluding securitised/assigned portfolio NPA Analysis Figures on standalone basis * The Company has recognised NPAs based on 4 months’ norms from the year ended 31st March, 2016 as against recognition on 5 months’ norm for the year ended 31st March 2015
- 39. 39 39 Transforming rural lives across the country Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies
- 40. 40 Business Area: Provide loans for home construction, extension, purchase and improvement to a wide base of customers in rural and semi-urban India Shareholding pattern: MMFSL- 87.5%; NHB- 12.5% Reach: Currently spread in 12 States Particulars (Rs. million) Year ended March – 17 Year ended March – 16 Year ended March – 15 Loans disbursed 21,162 15,525 9,896 No. of Customer Contracts (nos.) 172,462 125,074 81,960 Outstanding loan book 48,235 32,645 20,983 Total income 7,034 4,954 3,284 PBT 1,269 967 673 PAT 830 627 442 Mahindra Rural Housing Finance Limited
- 41. 41 Particulars (Rs. million) Year ended March – 17 Year ended March – 16 Year ended March – 15 Total income 1,742 1,492 1,262 Net premium 13,644 10,870 8,939 PBT 817 752 653 PAT 530 485 429 No. of Policies for the Period (nos.) 1,591,796 1,330,929 1,137,981 No. of employees (nos.) 956 802 715 Business Area: Licensed by IRDA for undertaking insurance broking in Life, Non-Life and reinsurance businesses Shareholding pattern: MMFSL- 85%; Inclusion Resources Pvt. Ltd.- 15% Mahindra Insurance Brokers Limited
- 42. 42 42 Transforming rural lives across the country Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies
- 43. 43 Awards and Accolades ■ Mahindra Finance is Certified as a Great Workplace by the Great Place to Work Institute.. ■ Mahindra Finance is commended with Significant Achievement in HR Excellence at the 7th Confederation of Indian Industry (CII) HR Excellence Award 2016. ■ Mahindra Finance has been appraised and rated at People CMM® Maturity Level 3 ■ Mahindra Finance included on Dow Jones Sustainability Index (DJSI) – Emerging Market Trends for 4th year in a row. We are the only Indian Company from Diversified Financial Services Sector to get selected ■ Mahindra Finance was included in ‘The Sustainability Yearbook 2017’ which was released by RobecoSAM. ■ Learning Day featured in the India Book of Records . ■ Mahindra Finance won the CNBC Asia’s Corporate Social Responsibility Award.
- 44. 44 44 Transforming rural lives across the country Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies
- 45. 45 Duration (months) RBI Norms Duration (months) MMFSL 5 and <= 16 10% > 4 and <= 11 10% > 16 and <= 28 20% > 11 and <= 24 50% > 28 and <= 52 30% > 24 months* 100% > 52 months 50% Provisioning Norms Conservative Risk Management Policies * Note: The Company, with effect from quarter ended 30th June 2016, has started considering the estimated realisable value of underlying security (which conforms to the RBI norms) for loan assets to determine 100% provisioning for assets which were 24 months overdue which has resulted in lower provision of Rs.833.7 million for the year ended March 31, 2017 as against Rs.1927.5 million for the quarter ended June 30, 2016 with a consequent impact on the profit before tax. Key Risks & Management Strategies Key Risks Management Strategies Volatility in interest rates Matching of asset and liabilities Rising competition Increasing branch network Raising funds at competitive rates Maintaining credit rating & improving asset quality Dependence on M&M Increasing non-M&M Portfolio Occurrence of natural disasters Increasing geographical spread Adhering to write-off standards Diversify the product portfolio Employee retention Job rotation / ESOP/ Recovery based performance initiatives Physical cash management Insurance & effective internal control At MMFSL, NPA provisioning norms are more stringent than RBI norms
- 46. 46 46 This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Mahindra & Mahindra Financial Services Limited (the “Company”), nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment there for. This presentation contains statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results of operations and financial condition of the Company. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” or other words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in such forward-looking statements as a result of various factors and assumptions which the Company believes to be reasonable in light of its operating experience in recent years. The Company does not undertake to revise any forward-looking statement that may be made from time to time by or on behalf of the Company. No representation, warranty, guarantee or undertaking, express or implied, is or will be made as to, and no reliance should be placed on, the accuracy, completeness or fairness of the information, estimates, projections and opinions contained in this presentation. Potential investors must make their own assessment of the relevance, accuracy and adequacy of the information contained in this presentation and must make such independent investigation as they may consider necessary or appropriate for such purpose. Any opinions expressed in this presentation are subject to change without notice. None of the Company, the placement agents, promoters or any other persons that may participate in the offering of any securities of the Company shall have any responsibility or liability whatsoever for any loss howsoever arising from this presentation or its contents or otherwise arising in connection therewith. This presentation and its contents are confidential and should not be distributed, published or reproduced, in whole or part, or disclosed by recipients directly or indirectly to any other person. In particular, this presentation is not for publication or distribution or release in the United States, Australia, Canada or Japan or in any other country where such distribution may lead to a breach of any law or regulatory requirement. The information contained herein does not constitute or form part of an offer or solicitation of an offer to purchase or subscribe for securities for sale in the United States, Australia, Canada or Japan or any other jurisdiction. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to or for the benefit of US persons absent registration or an applicable exemption from registration. CRISIL DISCLAIMER: CRISIL limited has used due care and caution in preparing this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published/reproduced in any form without CRISIL‟s prior written approval. CRISIL is not liable for investment decisions which may be based on the views expressed in this report. CRISIL Research operates independently of, and does not have access to information obtained by CRISIL‟s Rating Division, which may, in its regular operations, obtain information of a confidential nature that is not available to CRISIL Research. Disclaimer
- 47. 47 47 Thank You Transforming rural lives across the country