Capital Asset & M otilal O swal Market Wealth Business Business F inancial S ervices Housing Fund Earnings Presentation | Q3FY17 Finance Based Business Business M arching O nwards with F ocused S trategies
Highlights Business Updates Industry Trends
Highlights Business Updates Industry Trends
Key messages this quarter Revenue model more Each of the businesses Annualised ROE Strong liquidity in B/S predictable with rising highly profitable with of 23% (~Rs 8.2 bn) to fund share of HFC & AMC immense scalability in YTD FY17 future opportunities Operations Financials Q3FY17 PAT Q3FY17 Revenue AUM (AMC + PE) Equity Market Share Rs 0.9 bn Rs 4.6 bn Rs 186 bn, 1.9 % in Q3FY17 78 % YoY 54 % YoY 49 % YoY vs 2.3 % in Q3FY16 PAT Margin ROE* AMC Rank (Equity AUM) Wealth AUM 10 20 % in Q3FY17 23 % in YTD FY17 Rs 91 bn, vs 12 in Dec 2015 vs 17 % in Q3FY16 49 % YoY vs 12% in FY16 Dividend per sh.** Unrealized gains Depositary AUM Aspire Loan book Rs 2.5 in Q3FY17 in MF investments** Rs 361 bn, Rs 33 bn, Rs 1.9 bn as of Dec vs ~ Rs 3.5 in FY16 35 % YoY 136 % YoY 4 **ROE is annualized, and does not include unrealised gains on investments in our MF products ** Q3FY17 dividend is only Interim, while FY16 dividend is Interim and Final
Well Balanced Growth Housing Capital Finance Markets 46% 38% 33% Revenue growth in Q3FY17 led by HFC & Asset Management, followed by 21% Q3 FY17 Capital Markets. Revenue diversification bearing fruit Consol. Revenue ` 4.6 bn Capital Asset Housing Fund 12% + 54 % YoY Markets Management Finance Based +26% YoY +56% YoY +143% YoY +2% YoY 8% 21% Fund Based 21% Outer circle: Q3FY17 Asset Management Inner circle: Q3FY16 Capital Housing Markets Finance 16% Profits from all segments grew strongly in Q3FY17; Stability offered by 19% 33% 19% Q3 FY17 HFC & AMC complemented with upside offered by Capital Markets Consol. Profit ` 0.9 bn Capital Asset & Housing Fund Fund + 78 % YoY Markets Wealth Mngt Finance Based Based 22% 43% + 264% YoY + 43% YoY + 82% YoY +25% YoY 30% 18% Outer circle: Q3FY17 Asset & Wealth Management Inner circle: Q3FY16 In Revenues, Capital Markets includes broking, investment banking & wealth management, while Asset Management 5 includes mutual funds, PMS and PE; In PAT, wealth is part of Asset & Wealth Management, instead of Capital Markets
Well-positioned across the client pyramid Institutions 620+ Corporates 100+ AMC Distributors 2,200+ HNI Wealth Families 2,000+ Retail Broking and Distribution Clients 840,000+ Affordable Housing Loan Families 36,000+ 6 Data as of Dec 2016
Consolidated financials Q3FY17 Revenue up 54% Q3FY17 Opex up 40% YoY People cost up 6% YoY in Other costs up 1% in Q3FY17; YoY led by all-round led by increase in Q3FY17, due to hiring in increased mainly in advt in traction in every business commission in AMC & Broking HFC & Broking AMC & network in HFC Particulars Q3 FY17 Q3 FY16 Change Q3 FY17 Q2 FY17 Change 9M FY17 9M FY16 Change FY16 Dec 31, Dec 31, (%) Dec 31, Sep 30, (%) Dec 31, Dec 31, (%) Mar 31, Rs million 2016 2015 Y-o-Y 2016 2016 Q-o-Q 2016 2015 Y-o-Y 2016 Total Revenues 4,555 2,959 54% 4,555 4,608 -1% 12,813 7,769 65% 10,937 Operating expenses 846 606 40% 846 917 -8% 2,474 1,736 43% 2,325 Personnel costs 676 639 6% 676 940 -28% 2,303 1,796 28% 2,510 Other costs 416 413 1% 416 492 -16% 1,304 1,197 9% 1,639 Total costs 1,938 1,658 17% 1,938 2,349 -18% 6,081 4,729 29% 6,474 EBITDA 2,617 1,301 101% 2,617 2,259 16% 6,732 3,040 121% 4,463 Depreciation 83 96 -13% 83 81 3% 237 255 -7% 349 Interest 1,306 490 166% 1,306 1,120 17% 3,258 1,085 200% 1,738 Exceptional items 0 0 nm 0 429 -100% 540 0 nm 0 PBT 1,228 715 72% 1,228 1,486 -17% 3,777 1,700 122% 2,376 Tax 328 206 60% 328 407 -19% 982 460 113% 657 Minority Interest 9 8 5% 9 64 -86% 96 20 375% 28 Reported PAT 891 501 78% 891 1,016 -12% 2,698 1,219 121% 1,691 EPS - Basic 6.2 3.5 6.2 7.1 18.8 8.6 11.9 EPS - Diluted 6.1 3.5 6.1 7.0 18.6 8.4 11.7 No.of shares outstanding 144 142 144 143 144 142 142 (million) - FV Rs 1/share ● Exceptional items includes revenue from share in profit on sale of investments (carry share) made in the 1 st PE growth fund, and impact of a write-off on account of doubtful NPA ● Declared an interim dividend of Rs 2.5 per share (FV of Rs 1 per equity share) 7
Segment-wise results Housing Finance, along with Asset Mgt and Broking PAT Mix change; rising proportion of Housing have led the YoY growth in revenues this year Finance and Asset Management in last 2 years 1,436 1,691 2,698 2% 274 21 12,813 Housing Finance 862 130 19% 23% 2,723 22% 15% 1,035 14% Fund Based Businesses 7,769 32% 37% Asset & Wealth Management 22% 62% 28% 23% Capital Market businesses 9MFY16 Broking & HFC AMC Fee Fund IB Fee Others 9MFY17 FY15 FY16 9MFY17 Related related (incl PE) based ● Capital Markets includes broking and investment banking ● Asset and Wealth Management includes asset management, private equity and wealth mngmt ● Housing Finance includes Aspire Home Finance ● Fund Based Business includes sponsor commitments to our AMC funds and LAS book 8
Balance sheet Rs million As on Dec 31, 2016 As on Mar 31, 2016 Sources of Funds Networth 17,252 14,365 Loan funds 45,881 25,891 Minority interest 269 162 Deferred tax liability 230 62 Total 63,631 40,480 Application of Funds Fixed assets (net block) 2,573 2,921 Investments 23,266 12,311 Deferred tax asset - - Current Assets (A) 49,941 35,674 - Sundry debtors 8,902 7,099 - Cash & Bank Balances 2,538 2,867 - Loans & Advances 37,682 24,610 - Other Assets 819 1,098 Current liabilities (B) 12,149 10,426 Net current assets (A-B) 37,792 25,248 Total 63,631 40,480 9
ROE Attribution Proportion of Group Networth (Rs 17 billion as of Dec 2016) deployed across the 4 business segments Asset & Capital Housing Fund Markets Wealth Mgt Finance Based 5% 9% 34% 52% Segment-wise ROE* for the YTD 2016 period Capital Asset & Housing Fund Markets # Wealth Mgt & Based @ Finance 52% 200% 15% 6% * RoE calculated for 9MFY17 on Average Networth and annualised for FY17 # Treasury gains in Agency business P&L has been classified under Fund Based & Net carry earned on PE exits shown under Asset & Wealth Management @ Does not include unrealized gain on our MF investments (Rs 1.9 bn as of Dec 2016). The post-tax XIRR of these investments (since inception) of ~19%; Other treasury investments are valued at cost 10
Highlights Business Updates Industry Trends
Building an integrated financial services business model Capital Market Businesses • Retail Broking & Distribution • Institutional Equities Asset & Wealth Businesses • Investment Banking • Asset Management • Private Equity • Wealth Management Housing Finance • Aspire Home Finance Fund Based Business • Sponsor commitments to our AMC & PE funds • NBFC LAS book 12
Capital Market Businesses • Retail Broking & Distribution • Institutional Equities Asset & Wealth Businesses • Investment Banking • Asset Management • Private Equity • Wealth Management Housing Finance • Aspire Home Finance Fund Based Business • Sponsor commitments to our AMC & PE funds • NBFC LAS book 13
Broking activities (MOSL) Held our market share Digital & distribution biz Significant scope for Biz consolidates to in the high-yield cash growing; CAG events operating leverage larger brokers in every segment YoY & QoQ evincing good interest still exists in this biz up cycle Particulars Q3 FY17 Q3 FY16 Change Q3 FY17 Q2 FY17 Change 9M FY17 9M FY16 Change FY16 Dec 31, Dec 31, (%) Dec 31, Sep 30, (%) Dec 31, Dec 31, (%) Mar 31, Rs million 2016 2015 Y-o-Y 2016 2016 Q-o-Q 2016 2015 Y-o-Y 2016 Total Revenues 1,834 1,392 32% 1,834 1,877 -2% 5,216 4,107 27% 5,496 EBITDA 747 377 98% 747 571 31% 1,815 1,121 62% 1,485 PBT 520 170 207% 520 349 49% 1,185 647 83% 794 PAT 429 122 253% 429 235 83% 904 474 91% 605 ● Q3FY17 included profit on sale of mutual funds to the tune of Rs 215 million ● Overall volumes in the market grew 75% YoY in Q3FY17. Within this, F&O grew 79% YoY while cash grew 21% YoY. Hence, cash’s proportion in the market mix fell from 8% in Q3FY16 to 5% in Q3FY17. Within cash, retail cash volume was up 27% YoY to Rs 122 billion in Q3FY17 while institution cash was up 26% to Rs 68 billion. MOSL’s overall volume grew 48% YoY to Rs 84 billion in Q3FY17. We held our cash market share in Q3FY17 on YoY & QoQ basis. But the continued shift in the mix to F&O in the market meant our overall market share dipped from 2.3% in Q3FY16 to 1.9% in Q3FY17. Our blended yield in Q3FY17 was 3.1 bps ● We invested in manpower (up 64% from Mar-2015), brand and technology since the last two years. Some of the operating leverage from these is bearing fruit now, and the coming quarters should see the full benefit. 14
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