RCS - Muthoot Finance Ltd - Non Regulatory (Q2 FY20 Results)

Muthoot FinanceAnnouncement

14/11/2019 12:35

RNS Number : 4513T
Muthoot Finance Limited
14 November 2019
 


      Kochi, November 13, 2019:  
 
Consolidated Loan Assets Under Management increased by 13% YoY at Rs.40390crs for H1 FY20
Consolidated Profit after Tax increased by 42% YoY at Rs.1472crs for H1 FY20
Standalone Loan Assets Under Management increased by 11% YoY at Rs.35731crs for H1 FY20
Standalone Profit after tax increased by 42% YoY at Rs.1388crs for H1 FY20
 
Consolidated Results of Muthoot Finance Ltd
Muthoot Finance Ltd's Consolidated Loan Assets under management achieved a YoY increase of 13% at Rs.40390crs as against last year of Rs.35835crs for H1 FY20. Consolidated Profit after tax achieved a YOY increase of 42% of Rs.1472crs as against last year of Rs.1033crs for H1 FY20
 







H1 FY20


H1 FY19


YOY %


Q2 FY20


Q1 FY20


QoQ %


FY19


YTD %




Group Branch Network


5190


4765


9%


5190


5092


1.9%


5020


3%




Consolidated Gross Loan Assets of the Group (Rs. In crores)


40390


35835


13%


40390


40228


0.4%


38304


5%




Consolidated Profit of the Group (Rs. In crores)


1472


1033


42%


909


563


61%


2103








Contribution in the Consolidated Gross Loan Assets of the Group




Muthoot Finance


35250


32132


10%


35250


35406


-0.4%


33746


4%




Subsidiaries


5140


3703


39%


5140


4822


7%


4558


13%




Contribution in the Consolidated Profit of the Group




Muthoot Finance


1375


971


42%


853


522


63%


1946








Subsidiaries


97


62


56%


56


41


37%


157



















 
 
Standalone Results of Muthoot Finance Ltd and its subsidiaries
 
Muthoot Finance Ltd (MFIN), the largest gold financing company in India in terms of loan portfolio, registered an increase in net profit of 42%, at Rs.1388crs for H1 FY20 as against Rs.975crs in the previous year.  Loan Assets stood at Rs.35731crs as at September 30, 2019 as against Rs.32319crs as at September 30, 2018, Y-o-Y growth of 11%.
 
Muthoot Homefin (India) Ltd (MHIL), the wholly owned subsidiary, increased its loan portfolio to Rs.2098crs as against previous year of Rs.1775crs, a YoY increase of 18%. During Q2 FY20, loan portfolio increased by Rs.110crs, QoQ growth of 6%. Total revenue for Q2 FY20 & H1 FY20 stood at Rs.91crs & Rs.152crs as against previous year total revenue of Rs.55crs & Rs.104crs . It achieved a profit after tax of Rs.14crs & Rs.20crs in Q2 FY20 & H1 FY20 as against previous year profit of Rs.11crs & Rs.21crs. Its Stage III Asset on Gross Loan Asset % as on September 30, 2019 stood at 1.10%.
M/s. Belstar Microfinance Private Limited (BMPL) , an RBI registered micro finance NBFC and Subsidiary Company where Muthoot Finance holds 70.01% stake, grew its loan portfolio to Rs.2107crs as against last year of Rs.1381crs, a YoY increase of 53%. During Q2 FY20, loan portfolio increased by Rs.169crs. It achieved a profit after tax of Rs.28crs & Rs.51crs in Q2 FY20 & H1 FY20 as against previous year profit after tax of Rs.16crs & Rs.29crs. Its Stage III Asset on Gross Loan Asset % as on September 30, 2019 stood at 1.02%.
Muthoot Insurance Brokers Pvt Limited (MIBPL), an IRDA registered Direct Broker in insurance products and a wholly owned subsidiary company generated a total premium collection amounting to Rs.71crs & Rs.132crs in Q2 FY20 & H1 FY20 as against Rs.67crs & Rs.116crs in the previous year. It generated a Profit after Tax of Rs.4crs & Rs.7crs in Q2 FY20 & H1 FY20 as against Rs. 4crs & Rs.6crs in the previous year.
 
The Sri Lankan subsidiary - Asia Asset Finance PLC. (AAF) where Muthoot Finance holds 72.92% stake, increased its loan portfolio to LKR 1314crs as against last year of LKR 1124crs, a YoY increase of 17%. During Q2 FY20, loan portfolio increased by LKR 24crs. Total revenue for Q2 FY20 & H1 FY20 stood at LKR 86crs & LKR 166crs as against previous year total revenue of LKR 69crs & LKR 138crs. It generated a profit after tax of LKR 3crs & LKR 5crs in Q2 FY20 & H1 FY20 as against previous year profit after tax of LKR 2crs & LKR 4crs.
Muthoot Money Ltd (MML), became a wholly owned subsidiary of Muthoot Finance Ltd in October 2018. MML is a RBI registered Non- Banking Finance Company engaged mainly in extending loans for vehicles. The operations are now centered in Hyderabad. Recently, Company has started extending loans for Commercial Vehicles and Equipments. During Q2 FY20, it has increased its loan portfolio to Rs.426crs. During Q2 FY20, loan portfolio increased by Rs.34crs. Total revenue for Q2 FY20 & H1 FY20 stood at Rs.17crs & Rs.31crs.
 
Management Quote
Commenting on the results M G George Muthoot, Chairman stated, "We are glad to announce that consolidated loan assets of the Group grew by 13% at Rs.40390crs during H1 FY20 as against last year of Rs.35835crs. Consolidated Profit increased by 42% at Rs.1472crs during H1 FY20 as against last year of Rs.1033crs."
 
Speaking on the occasion George Alexander Muthoot, Managing Director said, "During the quarter, the Company got rated by 3 International Credit Rating agencies - Fitch Ratings at "BB+/Stable", S&P Global at "BB/Stable" & Moody's Investor Service at "Ba2/Stable . In October 2019, Company raised 450 Million USD through issuance of 6.125% Senior Secured Notes making the first private sector NBFC to make a debut issue under 144A/Reg. S mode"
 
Financial Highlights (MFIN) :







H1 FY20


H1 FY19


YOY %


Q2 FY20


Q2 FY19


YoY %


Q1 FY20


QoQ %








(Rs.in Crs)


(Rs.in Crs)






(Rs.in Crs)


(Rs.in Crs)






(Rs.in Crs)








Total Income


3999


3283


22%


2141


1650


30%


1859


15%




Profit Before Tax


1864


1500


24%


1047


745


41%


817


28%




Profit After Tax


1388


975


42%


858


484


77%


530


62%




Earnings Per Share(Basic) Rs.


34.64


24.38


42%


21.41


12.09


77%


13.23


62%




Loan Assets


35731


32319


11%


35731


32319


11%


35816


-0.24%




Branches


4540


4370


4%


4540


4370


4%


4502


1%



 



Particular


H1 FY20


H1 FY19


Q2 FY20


Q2 FY19


Q1 FY20




Return on Average  Loan assets


7.87%


6.33%


9.59%


6.11%


6.05%




Return on Average Equity


27.23%


23.57%


33.74%


22.70


21.70%




Book Value Per Share (Rs.)


264.48


219.65


264.48


219.65


243.02



 



Particular


Q2 FY20


Q2 FY19


Q1 FY20




Capital Adequacy Ratio


27.11


25.92


24.72




Share Capital & Reserves (Rs. in Crs)


10599


8790


9743



 
Business Highlights (MFIN):



Particular


H1 FY20


H1 FY19


Growth (YoY)




Branch Network


4540


4370


4%




Gold Loan Outstanding (Rs. in Cr)


34,942


32037


9%




Credit Losses (Rs. in Cr)


17


5


240%




% of Credit Losses on Gross Loan Asset Under Management


0.046%


0.015%


207%




Average Gold Loan per Branch (Rs. In Cr)


7.70


7.33


5%




No. of Loan Accounts (in lakh)


81


82


-1%




Total Weight of Gold Jewellery pledged (in tonnes)


171


168


2%




Average Loan Ticket Size


43041


39294


10%




No. of employees


25091


23888


5%



 
Other Highlights:
 
1.  Public Issue of Non-Convertible Debentures
 
During October 2019, Company successfully completed 21st Public Issue of Non-Convertible Debentures raising Rs.459crs.
 
2.  Muthoot Finance obtains credit ratings from three International Credit Rating Agencies - FITCH RATINGS, S&P GLOBAL RATINGS and MOODY'S INVESTOR SERVICE
 
Muthoot Finance Ltd has been assigned Long Term rating of 'BB+' with 'Stable' Outlook by Fitch Ratings. S&P Global Ratings has assigned a Long Term rating of 'BB' with 'Stable' Outlook. Moody's Investor Service has assigned 'Ba2' Corporate Family Rating with 'Stable' Outlook.
 
According to Fitch Ratings report, 'The ratings take into account Muthoot Finance's well-established franchise in the niche segment of gold-backed financing, its low credit losses and satisfactory leverage. '
 
According to S&P Global Ratings report, 'The ratings on Muthoot Finance are driven by the company's very strong capital and earnings, with the risk-adjusted capital ratio at above 45%. Muthoot Finance also has a strong market position in loans against gold although it is relatively small in the overall financial sector in India.'
 
According to Moody's Investor Service report, 'Rating takes into account the company's (1) leading franchise and well established track record in lending against the gold jewelry segment in India, and (2) strong solvency metrics, including asset quality, capital and profitability'
3.  Muthoot Finance Ltd raises USD 450 million from International Bond Markets First Private Sector NBFC debut issue in Rule 144A / Reg S format
Muthoot Finance Ltd ("MFIN" or "Company"), the largest gold loan company in India, has successfully priced a USD 450 Million Fixed Rate Senior Secured issuance in 144A / Reg S format for a 3 year tenor at 6.125%. MFIN bond transaction marks the first international bond by a NBFC to debut in 144A / Reg S market, allowing it to tap the US investor base in addition to Asia and Europe. The proceeds will be used for permitted purposes including onward lending in accordance with RBI's ECB Guidelines and other applicable laws.
 
The Company engaged with investors during an extensive deal roadshow across Singapore, Hong Kong, London and US. Backed by strong investor feedback, the transaction was launched with an initial price guidance of 6.375% area. Following a strong order book momentum supported by high quality real money investors, the Company was able to tighten pricing by 25bps to 6.125%.
 
The final order book was in excess of USD 1.2 Billion with oversubscription of more than 2.5x. The transaction witnessed 37% participation from Asia, 28% from Europe & Middle East and 35% from US with 88% investments from asset managers, 6% from Insurance & Pension Funds and 6% from others.
 
The bonds will be listed on International Securities Market of the London Stock Exchange.
 
Earlier this month, Company had obtained issuer rating Long Term rating of 'BB+' with 'Stable' Outlook by Fitch Ratings, 'BB' with 'Stable' Outlook by S&P Global Ratings and  'Ba2' Corporate Family Rating with 'Stable' Outlook by Moody's Investor Service.
 
Deutsche Bank and Standard Chartered Bank acted as the Joint Global Coordinators and Joint Book Runners for the issue.
 
M.G.George Muthoot, Chairman, on this inaugural issue stated "The response from international bond investors to our debut international bond issue once again reiterates the robustness and long track record of our  gold loan business  and is a recognition of India's retail credit story. This fund raise will enable us in further diversifying and strengthening our sources of funding. We look forward to strengthening our partnership with global investors"
 
About Muthoot Insurance Brokers Pvt Limited:
 
MIBPL is a wholly owned subsidiary of Muthoot Finance Ltd. It is an unlisted private limited company holding a license to act as Direct Broker from IRDA since 2013.It is actively distributing both life and non-life insurance products of various insurance companies. During Q1 FY20, it has insured more than 433,000 lives with a first year premium collection of Rs.358million under Traditional, Term and Health products. The same was 445,000 lives with a first year premium collection of Rs.347 Million in Q1 FY19 respectively.
 
Key Business Parameters



Particulars


H1 FY20


H1 FY19


Q2 FY20


Q2 FY19


Q1 FY 20


FY 19




Total Premium Collection (Rs. In millions)


 
1315


1165


 
709


670


 
606


2676




No. of Policies


 
11,67,009


998,786


 
725,805


548,410


 
441,204


2,240,560



 
 
About Muthoot Homefin (India) Limited:
 
MHIL is a Housing Finance Company registered with The National Housing Bank (NHB). It is a wholly owned subsidiary of Muthoot Finance Limited. 
 
MHIL's prime goal is to contribute towards financial inclusion of LMI families by opening doors of formal housing finance to them. Its focus is on extending Affordable Housing Finance. MHIL would be concentrating primarily on retail housing loans in the initial stages. It operates on a 'Hub and Spoke' model, with the centralized processing based out of Corporate Office at Mumbai. MHIL has operations in 14 states and 2 Union territories - Maharashtra (including Mumbai), Gujarat, Rajasthan, Madhya Pradesh, Kerala, Karnataka, Telangana, Andhra Pradesh, Haryana, Chandigarh, Uttar Pradesh, Chattisgarh, Punjab, Tamil Nadu, Delhi and Pondicherry.
 
MHIL has long term debt rating of AA- (Stable) for its bank limits which indicates "High degree of safety with regard to timely servicing of financial obligations and carry very low credit risk" and short term debt rating of 'A1+' for its Commercial Paper programme which indicates "Very strong degree of safety regarding timely payment of financial obligations and carry lowest credit risk" from ICRA Ltd.
 
CRISIL Ltd assigned long term debt rating of AA (Stable) which indicates "High degree of safety with regard to timely servicing of financial obligations and carry very low credit risk."
 
Key Financial Parameters                                                             (Rs. In Millions)                                                                    



Particulars


H1 FY20


H1 FY19


Q2 FY20


Q2 FY19


Q1 FY20


FY 19




No. of branches


103


73


103


73


101


96




No. of Sales Offices


132


132


132


132


132


132




No. of Employees


407


287


407


287


401


382


































Loan Portfolio


20975


17754


20975


17754


19875


19075


































Capital Adequacy Ratio


45%


45%


45%


45%


45%


47%


































Total Revenue


1523


1040


908


553


620


2257




Total Expense


1242


749


716


414


530


1746




Profit Before Tax


282


291


192


139


90


511




Profit After Tax


202


210


139


105


62


363




Shareholder's Funds


4143


3789


4143


3789


4004


3942




Total Outside Liabilities


17142


14065


17142


14065


16173


15530




Total Assets


21285


17854


21285


17854


20177


19472


































Stage III Loan Assets


219


138


219


138


160


142




% Stage III asset on Gross Loan Asset


1.10


0.78


1.10


0.78


0.81


0.74




Stage III ECL Provision


192


26


192


26


56


22




ECL Provision


272


96


272


96


134


37




ECL Provision as a % of Gross Loan Asset


1.36


0.54


1.36


0.54


0.68


0.19



 
About Belstar Microfinance Private Limited (BMPL):
 
BMPL was incorporated on January 1988 at   Bangalore and the Company was registered with the RBI in March 2001 as a Non- Banking Finance Company. The Company was reclassified as "NBFC-MFI" by RBI effective from 11th December 2013. Muthoot Finance holds 70.01% of equity share capital of BMPL. BMPL was acquired by the 'Hand in Hand' group in September 2008 to provide scalable microfinance services to entrepreneurs nurtured by 'Hand in Hand's' Self Help Group (SHG) program. The Company commenced its first lending operations at Haveri District of Karnataka in March 2009 to 3 SHGs, 22 members for INR 0.2million.
 
In the last ten years of its operations, BMPL primarily relied on taking over the existing groups formed by Hand in Hand India. BMPL predominantly follows the SHG model of lending. Effective January 2015, BMPL started working in JLG model of lending in Pune district, Maharashtra.
 
As of September 30, 2019, BMPL operations are spread over 11 states and 1 UT (Tamil Nadu, Karnataka, Madhya Pradesh, Maharashtra, Kerala, Odisha, Chattisgarh, Gujarat, Rajasthan, Bihar, Uttar Pradesh and Pondicherry). It has 441 branches, with 82 controlling regional offices and employing 3309 staff. Its gross loan portfolio has grown from INR 0.20 million in March 2009 to INR 21,074 million in September 2019. For H1 FY 20, its Net Profit after Tax was Rs.509million and had a net worth of Rs.4509million.
 



Key Financial Parameters


















(Rs. In Millions)


 




Particulars


H1 FY20


H1 FY19


Q2 FY20


Q2 FY19


Q1 FY20


FY 19




No. of branches


498


305


498


305


441


400




No. of Employees


3837


2305


3837


2305


3309


2876


































Gross Loan Portfolio


21074


13806


21074


13806


19385


18419


































Capital Adequacy Ratio


24%


24%


24%


24%


23%


26%


































Total Revenue


2348


1575


1270


836


1079


3681




Total Expense


1657


1189


887


628


769


2650




Profit Before Tax


693


386


383


207


310


1031




Profit After Tax


509


286


281


161


229


729


































Shareholders' Funds


4509


2850


4509


2850


4243


4002




Total Outside Liabilities


17586


13409


17586


13409


15655


16437




Total Assets


22095


16259


22095


16259


19898


20439


































Stage III Loan Assets


213


134


213


134


224


211




% Stage III asset on Gross Loan Asset


1.02


0.97


1.02


0.97


1.16


1.15




Stage III ECL Provision


191


110


191


110


203


188




ECL Provision


301


155


301


155


271


264




ECL Provision as a % of Gross Loan Asset


1.45


1.13


1.45


1.13


1.40


1.43















 
About Asia Asset Finance PLC, Sri Lanka:
 
Asia Asset Finance PLC, (AAF) Colombo, Sri Lanka became a foreign subsidiary of Muthoot Finance Ltd on December 31, 2014.  The company formerly known as Finance and Land Sales has been in operation for over 48 years, evolving to serve the growing needs of people of Sri Lanka.
 
As on September 30, 2019, total holding in AAF by Muthoot Finance stood at 90 million equity shares representing 72.92% of their total capital. AAF is a Registered Financial Company based in Sri Lanka a fully licensed, deposit-taking institution registered with the Central Bank of Sri Lanka and listed in the Colombo Stock Exchange.
 
AAF is in lending business since 1970.  At present the company is involved in Retail Finance, Hire Purchase & Business Loans and has 25 branches across Sri Lanka. It has total staff strength of 549 currently. In 2015, it entered the space of Gold Loans with assistance of Muthoot Finance.
 



Key Financial Parameters


























LKR in millions




Particulars


H1 FY20


H1 FY19


Q2 FY20


Q2 FY19


Q1 FY20


FY 19


 




LKR/INR


0.387005


0.42834


0.387005


0.42834


0.38980


0.39578


 
































 




No. of Branches


25


17


25


17


24


23


 




No. of Employees


549


493


549


493


559


553


 
































 




Loan Portfolio


13143


11237


13143


11237


12904


12569


 
































 




Capital Adequacy Ratio


21


21


21


21


21%


19%


 
































 




Total Revenue


1655


1380


857


693


798


2869


 




Total Expenses


1592


1319


822


664


770


2775


 




Profit Before Tax


63


61


35


29


28


94


 




Profit After Tax


54


38


29


22


25


101


 
































 




Shareholders' Funds


2158


1897


2158


1897


2129


1953


 




Total Outside Liabilities


12340


10511


12340


10511


12237


11946


 




Total Assets


14498


12408


14498


12408


14366


13899


 


















 
About Muthoot Money Limited:
 
Muthoot Money Ltd (MML), became a wholly owned subsidiary of Muthoot Finance Ltd in October 2018. MML is a RBI registered Non- Banking Finance Company engaged mainly in extending loans for vehicles. The operations are now centered in Hyderabad. Recently, Company has started extending loans for Commercial Vehicles and Equipments.
 
As on September 30, 2019 it has a total loan portfolio of Rs. 4263Million.
 
 
Key Financial Parameters:                                         (Rs in millions)   



Pariculars


H1 FY 20


Q2 FY20


Q1 FY 20


FY 19




No. of branches


24


24


24


21




No. of employees


277


277


245


247


























Gross Loan Portfolio


4263


4263


3927


3107


























Capital Adequacy Ratio (%)


24


24


26


32


























Total Revenue


311


169


142


156




Total Expense


258


126


133


149




Profit Before Tax


53


43


9


7




Profit After Tax


32


32


(0.4)


3


























Stage III Loan Assets


38


38


12


-




% Stage III asset on Gross Loan Asset


0.90


0.90


0.30


-




Stage III ECL Provision


10


10


12


-




ECL Provision


52


52


48


15




ECL Provision as a % of Gross Loan Asset


1.21


1.21


1.23


0.47


























Shareholders' Funds


1067


1067


1035


1035




Total Outside Liabilities


3455


3455


3116


2317




Total Assets


4522


4522


4151


3352



                                                                                                                                         
 
 




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