MAHINDRA AND MAHINDRA FINANCIAL SERVICES LTD. investor presentation
- 1. 1 Mahindra & Mahindra Financial Services Limited (MMFSL)
- 2. 2 Table of Contents 1. Introduction 2. Key Investment Highlights 3. Financial Performance A. Appendix
- 3. 3 Table of Contents 1. Introduction 2. Key Investment Highlights 3. Financial Performance A. Appendix
- 4. 4 2,00,000+ EMPLOYEES $17.8 BN REVENUES 100+ COUNTRIES 20 INDUSTRIES 10 SECTORS Baa3 / BBB-* (Moody’s and S&P) Mahindra Group – Leaders in Many of Our Businesses TOP 5 IT SERVICE PROVIDER FROM INDIA INDIA’S #1 VACATION OWNERSHIP COMPANY INDIA’S LARGEST PRE-OWNED CAR COMPANY INDIA’S #1 UV MAKER WORLD’S LARGEST TRACTOR BRAND BY VOL. LARGEST NBFC IN RURAL & SEMI-URBAN INDIA Note: *Ratings refers to Mahindra and Mahindra Limited Source: http://www.mahindra.com/resources/pdf/about-us/The%20Mahindra%20Group%20Presentation%20-%20July%202016.pdf
- 5. 5 ...& Financial Services being Strategic to its Operations FY16 Group Revenue Split FY16 Group PBIT Split (before Exceptional Items) 58% 22% 8% 12% 38% 33% 21% -8% Group Market Capitalization (USD Bn, 31 Mar 2016) INR 800 Bn INR 49 Bn Note: Tech Mahindra treated as an Associate company and numbers reflect % share of M&M holding in Tech Mahindra 11.3 6.9 1.0 1.9 2.1 Mahindra Financial Services Others SsangYong Tech Mahindra Mahindra & Mahindra Automotive Farm Equipment Financial Services Others Source: http://www.mahindra.com/resources/pdf/about-us/The%20Mahindra%20Group%20Presentation%20-%20July%202016.pdf
- 6. 6 6 20+ years of experience in financing: A) Purchase of new and pre-owned: 1) Utility Vehicles, 2) Tractors, 3) Cars, 4) Commercial vehicles, construction equipments and B) SME Financing Product Profile 51.20% Mahindra & Mahindra Limited Mahindra Insurance Brokers Limited (“MIBL”) Mahindra Rural Housing Finance Limited (“MRHFL”) Mahindra Finance USA LLC (Joint venture with Rabobank group subsidiary) Mahindra Asset Management Company Pvt. Ltd. Mahindra Trustee Company Pvt. Ltd 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) 85% (1) 87.5%(2) 49% 100% 100% MMFSL – Ownership and Business Profile RBI registered Non Banking Finance Company with license to accept public deposits
- 7. 7 Long term and Subordinated debt Short term debt Long term and Subordinated debt Fixed Deposit Programme Long term and Subordinated debt Credit Rating Long term and Subordinated debt Short term debt Brickworks Outlook BWR AAA Stable FAAA Stable CRISIL (S&P’s affiliate) Outlook CRISIL AA+ Stable CRISIL A1+ -- CARE Outlook CARE AAA Stable IND AAA Stable India Ratings (Fitch’s affiliate) Outlook IND A1+ -- MMFSL’s Domestic Credit Rating
- 8. 8 Table of Contents 1. Introduction 2. Key Investment Highlights 3. Financial Performance A. Appendix
- 9. 9 Key Investment Highlights Regulatory Oversight F Diversified Product Offerings A Extensive Geographical Presence B Funding, Liquidity & Capitalisation Profile C Risk Management Policies E Access to Mahindra Ecosystem D Mahindra & Mahindra Financial Services Limited
- 10. 10 A. Diversified Product Offerings 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 Association of Mutual Funds in India 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 Mutual Fund & AMC Asset Management Company/ Investment Manager to „Mahindra Mutual Fund‟, which received certificate of registration from SEBI on 20 June 2016 and was launched on 4 July 2016
- 11. 11 Note: As on 31st March 17, ~48% of the AUM was from M&M assets * Others include SME assets A. Diversified Product Offerings 29% 31% 31% 30% 19% 18% 17% 17% 24% 23% 24% 23% 15% 13% 12% 13% 13% 15% 16% 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Mar' 2014 Mar' 2015 Mar' 2016 Mar' 2017 Auto/ Utility Vehicles Tractors Cars Commercial Vehicles & Const. Equipments Pre-Owned vehicles and Others* We have underwritten 556,122 loan contracts during FY 2017 with an average ticket size of Rs. 0.57 million Break Down of Asset Book
- 12. 12 B. Extensive Geographical Presence Coverage (as on March 2017) Branch Network as of 893 1,108 1,167 1,182 0 200 400 600 800 1,000 1,200 1,400 Mar‟14 Mar‟15 Mar‟16 Mar'17 Rural Touch Points 182,264 241,366 286,007 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Mar‟14 Mar‟15 Mar‟16 Extensive branch network with presence in 27 states and 4 union territories in India 1 Mizoram Pondicherry 1 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 58 TS
- 13. 13 44% 3% 29% 12% 12% NCDs Retail NCDs Bank Term Loan Fixed Deposit CP, ICD 46% 21% 8% 12% 13% Banks Mutual Fund Insurance & Pension Funds FPIs & Corporates Others (including retail deposits) C. Diversified Funding Mix Funding Mix by Investor Class (Mar’17) Funding Mix by type of Instrument (Mar’17) INR 355Bn INR 355Bn Access to deposits is unique strength of MMFSL with average ticket size of ~INR 200K across ~220,000 depositors Note: As of 31 Mar 2017, the aggregate amount of working capital facilities under the working capital facility consortium agreement totalled 20,000 million
- 14. 14 C. Matched ALM & Adequate Liquidity Profile Conservative asset liability policy with only positive mismatches Compliant with all RBI norms and policies on liquidity Unutilized credit lines of INR 6,235 Mn to manage any short term outflows 16,357 118,655 172,775 30,690 102,513 43,394 145,455 175,056 41,342 35,743 165.3% 39.9% 18.2% 19.7% 0.0% 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 Upto 1 month 1 Month - 1 Year 1 - 3 Years 3 - 5 Years Over 5 Years Outflows Inflows % Cumulative Mismatch INR Mn Note: As on 31st March 17
- 15. 15 Raised INR 19.07bn Equity in last 10 years from equity markets C. Strong Capital Base from Diversified Investor Segments 51.9% 30.4% 11.8% 5.9% Promoters* FIIs Mutual Funds and DIIs Non Institutions Top Public Shareholders as on March 31, 2017 * Mahindra & Mahindra Limited holds a stake of 51.2% in the Company. ESOP trust holds the balance 0.7% Franklin Templeton Investment Funds Aranda Investments (Mauritius) Pte Ltd (Temasek) Valiant Mauritius Partners Amansa Holdings Private Limited Life Insurance Corporation Of India Bank Muscat India Fund Vanguard Emerging Markets Merrill Lynch Markets Singapore HDFC Standard Life Insurance 15.5 15.5 14.6 13.2 2.5 2.8 2.7 4.4 18.0 18.3 17.3 17.6 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Mar' 2014 Mar' 2015 Mar' 2016 Mar' 2017 Tier 1 Tier 2 Capital Adequacy Ratios Shareholding Pattern as on March 31, 2017 Note: Capital adequacy has been determined without considering dividend for FY 2017 (as per accounting standards). Comparable number post considering dividend shall be 17.2% (Tier I – 12.8% and Tier II – 4.4%). Source: http://www.bseindia.com/corporates/shpSecurities.aspx?scripcd=532720&qtrid=91.00&Flag=New http://www.mahindrafinance.com/pdf/Capital_Buildup_Summary_31Dec2015.pdf
- 16. 16 D. Access to Mahindra Ecosystem Leveraging Mahindra Ecosystem VC and MD, MMFSL is a member of the Group Executive Board Group CFO & Group President – Strategy hold Board positions in MMFSL Closely integrated with Mahindra Group through governance mechanisms, talent management processes and core values Started as a captive finance company for M&M, the eco-system contributes a significant share of business (48% of AUM in Mar‟17) Strong Brand Recognition 9th most valuable Indian brand by Interbrand 2016 9th by Brand Equity, ET supplement in 2016 Leverage synergy opportunities across multiple Group businesses including by way of holding board positions
- 17. 17 E. Robust Underwriting Policies/Recovery Mechanism Mar’14 Mar’15 Mar’16 Mar’17 Total Assets (INR Mn) 318,622 353,895 400,764 466,338 Recognition Policy 5 months 5 months 4 months 4 months GNPA 4.4% 5.9% 8.0% 9.0% NNPA 1.9% 2.4% 3.2% 3.6% Provisioning Coverage Ratio 59.0% 61.0% 61.7% 61.8% Credit Losses (charged to P&L )1 1.6% 2.3% 2.6% 2.8% (Bad Debts & Write offs) / Total Assets 0.8% 1.4% 1.3% 1.8% Loan to Value Average Ticket Size Tenure vs. Economic Life Assets earnings capability vs EMI Delegated approval authority with controls Robust underwriting and recovery policies leading to low write offs and adequate factoring of it in the risk based pricing Key Framework – Underwriting Key Framework – Recovery Independent in-house legal team Separate overdue bucket wise collection verticals Strong re-possession capability Linkages with pre-owned vehicle distributors for sale of repossessed vehicles Note: 1. (Loan Provisions and Bad Debts & Write offs) / Total Assets
- 18. 18 At MMFSL, NPA provisioning norms are more stringent than RBI norms Key Risks & Management Strategies E. Robust Risk Management Policies Duration (months) RBI Norms Duration (months) MMFSL > 4 and <= 14 10% > 4 and <= 11 10% > 14 and <= 26 20% > 11 and <= 24 50% > 26 and <= 50 30% > 24 months* 100% > 50 months 50% 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 Note: * Credit of estimated realizable value of asset taken for loan assets which are 24 months overdue Provisioning Norms
- 19. 19 F. Regulatory Oversight Regulation NBFC-Deposit Taking Banks Liquidity – SLR/CRR No CRR, need to provide 15% as SLR on Fixed Deposits SLR at 20.75% and CRR at 4% Capital Adequacy Ratio 10% Tier I 15% overall Minimum capital adequacy of 9% Tier I and II Asset classification norms NPAs if delinquent > 4 months Norms are being aligned to be in line with banks by end on Mar 2018 NPAs if delinquent > 3months Provisioning norms 0.3% for Standard assets, 0.4% by Mar-18 0.25-1% depending on sector Regulatory Oversight Inspection at RBI‟s discretion Reporting – Regulatory returns Formal and informal guidance Inspection at RBI‟s discretion Reporting – Regulatory returns Formal and informal guidance Mahindra Finance is classified as a systemically important deposit-taking NBFC by the Reserve Bank of India
- 20. 20 Table of Contents 1. Introduction 2. Key Investment Highlights 3. Financial Performance A. Appendix
- 21. 21 Particulars Year ended March-17 Year ended March-16 Year ended March-15 Year ended March-14 RONW (Avg. Net Worth) 6.4% 11.4% 15.5% 18.6% Debt / Equity 5.35:1 4.84:1 4.63:1 4.70:1 Capital Adequacy 17.6% 17.3% 18.3% 18.0% Tier I 13.2% 14.6% 15.5% 15.5% Tier II 4.4% 2.7% 2.8% 2.5% EPS (Basic) (Rs.) 7.09 11.92 14.75 15.75 Book Value (Rs.) 113.9 107.0 99.7 89.6 Assets Under Management (Rs. Mn) 467,755 409,333 368,780 341,331 New Contracts During the period (Nos) 556,122 522,256 515,654 561,862 No. of employees 17,856 15,821 14,197 9,349 Summary & Key Ratios Note: Capital adequacy has been determined without considering dividend for FY 2017 (as per accounting standards). The comparable number post considering dividend shall be 17.2% (Tier I – 12.8% and Tier II – 4.4%).
- 22. 22 Spread Analysis Particulars Year ended March-17 Year ended March-16 Year ended March-15 Year ended March-14 Total Income / Average Assets 15.2% 16.3% 17.1% 17.7% Interest / Average Assets 7.0% 7.3% 7.7% 7.8% Gross Spread 8.2% 9.0% 9.4% 9.9% Overheads / Average Assets 3.5% 3.2% 3.1% 3.3% Pre-Provisioning Profits 4.7% 5.8% 6.3% 6.6% Write offs & NPA provisions / Average Assets 3.2% 2.9% 2.5% 1.8% Net Spread 1.5% 2.9% 3.8% 4.8% Net Spread after Tax 1.0% 1.8% 2.5% 3.2%
- 23. 23 Particulars (Rs. in Million) Year ended March-17 Year ended March-16 Year ended March-15 Year ended March-14 Revenue from operations 61,739 58,532 55,361 49,216 Other income 636 519 486 314 Total Revenue 62,375 59,051 55,847 49,530 Employee benefits expense 6,809 5,588 4,591 2,973 Finance costs 28,574 26,393 24,967 21,880 Depreciation and amortizations 460 409 415 243 Provisions and write offs 13,091 10,495 8,275 5,058 Other expenses 7,240 5,784 5,062 5,918 Total Expenses 56,174 48,669 43,310 36,072 Profit before tax 6,201 10,382 12,537 13,458 Tax expense 2,199 3,656 4,219 4,586 Profit for the year 4,002 6,726 8,318 8,872 Standalone Profit & Loss Account Note: Previous year figures have not been reclassified
- 24. 24 Particulars (Rs. in Million) As on Mar 31, 2017 As on Mar 31, 2016 As on Mar 31, 2015 As on Mar 31, 2014 EQUITY AND LIABILITIES Shareholders’ funds 64,772 60,881 56,694 50,942 Non-current liabilities a) Long-term borrowings 214,537 173,317 147,871 169,032 Non-current liabilities 224,300 182,125 154,176 174,976 Current liabilities a) Short Term Borrowings 58,648 43,469 48,710 12,443 b) Other current liabilities 89,335 89,462 74,876 64,911 Current liabilities 170,780 152,789 139,871 90,739 ASSETS Non-current assets a) Long-term loans and advances 222,599 184,172 170,037 157,795 Non-current assets 245,275 201,601 185,209 168,763 Current assets a) Short-term loans and advances 202,635 182,406 159,261 138,375 Current assets 214,577 194,194 165,532 147,894 Total Assets & Liabilities 459,852 395,795 350,741 316,657 Standalone Balance Sheet Note: Previous year figures have not been reclassified
- 25. 25 Particulars (Rs. in Million) Year ended March-17 Year ended March-16 Year ended March-15 Year ended March-14 Revenue from operations 71,462 65,539 60,211 52,753 Other income 545 436 398 253 Total Revenue 72,007 65,975 60,609 53,006 Expenses: Employee benefits expense 8,866 7,041 5,671 4,945 Finance costs 31,862 28,683 26,430 22,810 Depreciation and amortizations 537 457 455 261 Provisions and write Offs 13,896 10,982 8,491 5,190 Other expenses 8,468 6,571 5,563 5,185 Total Expenses 63,629 53,734 46,610 38,391 Profit before tax 8,378 12,241 13,999 14,615 Tax expense 3,081 4,367 4,750 4,967 Profit for the year 5,297 7,874 9,249 9,648 Minority Interest 181 151 120 104 Net Profit after Taxes and Minority Interest 5,116 7,723 9,129 9,544 Consolidated Profit & Loss Account Note: Previous year figures have not been reclassified
- 26. 26 Particulars (Rs. in Million) As on Mar 31, 2017 As on Mar 31, 2016 As on Mar 31, 2015 As on Mar 31, 2014 EQUITY AND LIABILITIES Shareholders' funds 69,602 64,694 59,427 52,937 Minority Interest 998 675 493 365 Non-current liabilities a) Long-term borrowings 249,849 203,412 168,652 182,538 Non-current liabilities 260,340 212,657 175,204 188,639 Current liabilities a) Short Term Borrowings 72,176 52,175 52,586 15,103 b) Other current liabilities 106,821 99,103 81,823 69,812 Current liabilities 203,126 172,043 151,207 98,634 ASSETS Non-current assets a) Long-term loans and advances 281,753 228,420 198,883 177,299 Non-current assets 299,777 242,749 212,210 186,994 Current assets a) Short-term loans and advances 221,766 194,669 167,620 143,806 Current assets 234,289 207,319 174,121 153,581 Total Assets & Liabilities 534,066 450,068 386,331 340,575 Consolidated Balance Sheet Note: Previous year figures have not been reclassified
- 27. 27 Table of Contents 1. Introduction 2. Key Investment Highlights 3. Financial Performance A. Appendix
- 28. 28 Auto Industry: Long term growth potential Source: *CRISIL Research, Cars & UV Global Comparison in terms of PV per thousand people Addressable HHs to increase over the next 5 years 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 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%. 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)
- 29. 29 Passenger Vehicles Industry: Overall Demand Drivers 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 Source: CRISIL Research, Cars & UV
- 30. 30 Commercial Vehicles Industry: Overall Demand Drivers 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 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 Source: CRISIL Research, Commercial Vehicles
- 31. 31 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% 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 Source: Tractor Industry: CRISIL Research, Tractors
- 32. 32 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 Source: Crisil
- 33. 33 Source: CRISIL Research, Retail Finance - Auto Automobile Finance Market: 5 years Projected Growth @16-18% (% 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% Growth in New Vehicle Finance Disbursements 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
- 34. 34 10% 17% 20% 33% 38% 40% 42% 42% 53% 68% 75% 114% 0% 40% 80% 120% India China Thailand Korea Malaysia Taiwan Hong Kong Germany Singapore USA UK Denmark 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 Growth in Housing Finance Disbursements Mortgage Penetration (as % of GDP) 0 1,500 3,000 4,500 6,000 7,500 9,000 2003-04 E 2006-07 E 2010-11 E 2014-15 E 2015-16 E 2020-21 F Banks HFCs 866 1,748 3,413 3,991 9,000 E: Estimated F: Forecasted Rs. Bn. 522 Source: Crisil Retail Finance – Housing
- 35. 35 Awards and Accolades Great Place to Work Institute in association with Economic Times has recognized Mahindra & Mahindra Financial Services Ltd. as one of INDIA’S BEST COMPANIES TO WORK FOR , 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 made it to the list of Carbon Disclosure Leadership Index (CDLI) for 2nd consecutive year in 2015 Mahindra Finance was honored for Best Overall Excellence in CSR in the organizational Category Mahindra Finance recognized in “Best Overall Excellence in CSR” by National Awards for excellence in CSR and Sustainability Mahindra Finance was honored with the IDF Award for excellent participation in Resource Mobilization for Humanitarian Projects
- 36. 36 36 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