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Investor Presentation
August 2, 2016
Safe harbour
This presentation describing our activities, projections and expectations for the future, may contain
certain ‘forward looking statements’ within the meaning of applicable laws and regulations. The actual
results of business may differ materially from those expressed or implied due to various risk factors
and uncertainties. These risk factors and uncertainties include the effect of domestic as well as global
economic and political events, volatility in interest rates and in the securities market, new regulations
and government policies that may impact our businesses as well as ability to implement our
strategies. We are under no obligation to publicly amend, modify or revise any forward looking
statement on the basis of any subsequent developments, information or events and assume no
liability for any action taken by anyone on the basis of any information contained herein.
2
Sustainable growth – Oriented portfolio
Revenue & PBT in ` Cr.
• JM Financial is a four • Corporate Finance Debt Capital Markets 41% 19% 41% 16% 37% 24% 29% 11% 26% 12%
decade old institution Investment Advisory • Equity Research, Sales 600 429
522 495
Banking, 408
founded by Mr. Nimesh • M&A Advisory – & Trading
Securities and 300
47 45
124 79 123
Kampani domestic & cross border • Wealth Management 20
Wealth 0
• Private Equity Synd • Financial Products FY13 FY14 FY15 FY16 Q1FY17
Management
• Equity Capital Markets - Distribution Revenue PBT
• Servicing clients across the
financial services spectrum 53% 72% 53% 71% 57% 67% 64% 79% 69% 84%
• Margin Financing • Commercial Real Estate 1,079
1,200 806
Fund based • Loan against property • Debt Restructuring 900 552 529 549
600 347 328
• PAN India Presence activities • Loan against Shares • ESOP Funding 300 183 200 143
0
• Broker Funding FY13 FY14 FY15 FY16 Q1FY17
Revenue PBT
• Firm four-decade footprints
- proven track record of 3% 1% 3% 1% 3% 3% 5% 8% 4% 6%
services space
3% 6% 3% 7% 2% 3% 1% 1% 0% -1%
Alternative 50 27 30 19 27
• Trusted & preferred partner • Real Estate Fund 25 16 15 12 4 1
Asset 0
– client centric business Management • Private Equity Fund -25 FY13 FY14 FY15 FY16 Q1FY17
(2)
model
Revenue PBT
400 319
214
Asset 120 158
200
89 61 75 60
Reconstruction • Acquisition of Bank NPA’s and resolution thereof 43 13
Business 0
FY13 FY14 FY15 FY16 Q1FY17
Revenue PBT
– value driven growth and; 2,000 450 • NBFC (Real Estate Lending, Debt
1,685
– long-term sustainability 400 Trading and Corporate Financing)
1,600 1,403 400 350 • Asset Reconstruction
1,200 1,042 331 300 2008 – 2016
• Q1 FY17 highlights – 1,007 • International Expansion in advisory
874 250
183 business
− Revenue ` 475 Cr 800 200
210 475 • FINTECH investments/lending
− PBT ` 171 Cr 150
400
100
− Net profit before minority 121
• NBFC (Securities Backed
0 86 50
interest ` 117 Cr FY12 FY13 FY14 FY15 FY16 Q1 FY17 Financing)
− EPS ` 1.09 2003 – 2007 • Alternative Asset Mgmt (Private
Revenue (Rs Cr) PAT (Rs Cr)
− ROE 12.1% Equity & Real Estate)
4
Delivering value
• Delivering consistent
superior returns to Augmenting value year-on-year Stock performance vs. Indices
shareholders - 35.54 36.66
6,000 40
• Stock trading at a P/E of 31.10 35 Stock / Index 12-M 3-Y
5,000
5,326
around 15.5x and a P/B of 26.29 27.69
30
24.87
1.8x 4,000
25 JMFL 31% 231%
3,738
3,000 20
3,290
CNX 500 3% 67%
2,894
2,804
15
• Continued focus on 2,000
2,438
2,092
10
1,976
1,947
maximizing shareholders’
1,865
1,170
1,214
1,000
5 CNX Smallcap 6% 129%
return
0 0
FY12 FY13 FY14 FY15 FY16 Jun-16 CNX Bank 0% 85%
Market Cap (Rs Cr) Net Worth (Rs Cr)
Book Value (Rs/share) CNX Finance 1% 80%
2.5
2.4
2.3
2.0 2.1
1.9
1.7 2.1 2.0
1.5 1.7
1.4
1.4 Conservative D/E depicting business strength,
1.0
0.9 0.9
adequate cash cushion and strong business
0.5 model
0.0
FY12 FY13 FY14 FY15 FY16 Q1FY17
Net worth on June 2016 ` 2,894 Cr (June 2015 ` 2,536 Cr), Book value on June 2016 ` 36.66
Key
Features Wealth Management AUM on June 2016 at ` 23,755 Cr (June 2015 ` 20,205 Cr)
Asset Reconstruction AUM on June 2016 at ` 9,792 Cr (June 2015 ` 8,444 Cr)
Alternative Asset Management AUM on June 2016 at ` 751 Cr (June 2015 ` 900 Cr)
Asset Management Quarterly Average AUM at ` 12,756 Cr (Q1 FY16 ` 11,676 Cr)
6
I : Quarterly performance – Q1 FY17
7
Key features of Q1 FY17 consolidated
financial performance
Profit before tax ` 171 Cr (Q4FY16 ` 201 Cr, Q1FY16 ` 146 Cr)
Profit after tax and before minority interest ` 117 Cr (Q4FY16 ` 148 Cr, Q1FY16 ` 100 Cr)
Key
Features Profit after tax ` 86 Cr (Q4FY16 ` 114 Cr, Q1FY16 ` 72 Cr)
Earning per share stood at ` 1.09 (Q4 FY16 1.44, Q1 FY16 0.92) (not annualised)
8
Consolidated financial performance – Quarter by Quarter
Snapshot
` Cr)
Gross revenue (` ` Cr)
Profit before tax (`
200 100 84
100 50
0 0
Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17
` Cr)
Net consolidated profit (` `) ( not annualised)
EPS (`
50
0.5
25
0
Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 0.0
Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17
9
Consolidated financial performance – Quarter by Quarter
Snapshot
` Cr)
Net worth (` Cr `)
Book value per share (`
` Cr)
Borrowings (` Cr Debt equity
4,000 1.5
3,000 1.0
2,000
0.5
1,000
0 0.0
Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17
10
Results for Q1 FY17 (Consolidated )
` Cr Q1 FY17 Q4 FY16 QoQ Q1 FY16 YoY
Depreciation 5 5 3% 5 10%
Net profit before minority interest 117 148 -21% 100 17%
11
Segment performance
Segment revenue Q1 FY17 Q4 FY16 QoQ Q1 FY16 YoY
Investment Banking and Securities Business 123 143 -14% 124 -1%
Fund Based Activities 328 297 10% 241 36%
Alternative Asset Management 1 4 -81% 3 -75%
Asset Management 18 23 -20% 15 24%
Others 30 51 -41% 101 -71%
Total Segment Revenue 500 518 -4% 484 3%
Less: Inter - segmental revenue 24 43 -44% 101 -76%
Total Revenue 475 475 - 383 24%
12
II : Balance sheet highlights
13
Balance sheet highlights
Free cash and cash equivalent on June 2016 ` 850 Cr (March 2016 ` 914 Cr)
Balance
Sheet
Highlights
Debt equity : Gross gearing 2.3x, Net gearing 2.0x
Balance sheet size on June 2016 ` 10,847 Cr (March 2016 ` 10,956 Cr)
CRISIL, ICRA and India Ratings (FITCH) maintains long term rating of JM Financial group companies
to 'AA/Stable‘
14
Summary Balance sheet
As at As at
` Cr
June 30, 2016 March 31, 2016
15
III : Business update
16
Investment Banking business
• Over four decades of
leadership in M&A and
Capital Markets
Key strength lies in innovative structuring and execution of complex, challenging deals
• Strong track record of and restructuring of corporate groups & businesses.
landmark M&A transactions
• Pioneer in innovating
capital market products
Leadership positions in all product areas and unmatched market share for landmark
• BW Business World Magna
Awards 2015 – “M&A Deal transactions
Maker of the Year”
Won a number of awards and recognitions over the years for our advisory and execution
capabilities. Awarded ‘Best Corporate and Institutional Bank –Domestic’ and ‘Best Equity
House’ at the The Asset Triple A Country Awards.
17
Investment banking business
Snapshot for Q1FY17
BRLM for Initial Public Offer of Thyrocare Technologies Limited – Rs 479 crore
BRLM for Initial Public Offer of Parag Milk Foods Limited – Rs 750 crore.
Lead Manager for Unsecured Subordinated Redeemable Non Convertible Debentures of Mahindra & Mahindra Financial
Services Limited – Rs 1,000 crore.
Sole financial advisor to Vertex Group on the sale of Vertex Customer Management India Ltd to Altruist Technologies Ltd.
Sole financial advisor to TransUnion LLC for increasing its stake in Credit Information (Bureau) Limited..
18
Wealth Management and Broking business
Wealth AUM stands at ` 23,755 Cr with a team size of Worldwide institutional reach - dominant global & local
more than 60 wealth advisors as on June 2016 institutional franchise
Presence in 7 major cities in India i.e. Mumbai, Delhi, Institutional distribution strength - We cover 143 funds
Bangalore, Ahmedabad, Pune, Kolkata & Hyderabad across regions
Over 8,300 active IFDs Market Share on NSE in Q1FY17 – overall 0.72%, 3.12
Coverage of broking segment - 114 cities % cash segment
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Wealth Management and Broking business
` Cr)
Average Daily Turnover (` Equity Market Share on NSE (%)
3,000 5.0
4.5
2,500
4.0
0.72
0.95 0.84
0.94 0.73
3.5
2,000 0.93 0.58
0.69
0.79 0.60
3.0 0.81
0.80
1,000
1,056 1.5 3.12
1,015 1,005 2.88 2.82
2.74 2.64
2.43
1.0
500
0 0.0
FY12 FY13 FY14 FY15 FY16 Q1 FY17 FY12 FY13 FY14 FY15 FY16 Q1 FY17
Avg Cash (Rs. Cr) Avg FAO (Rs. Cr) Cash Market Share FAO Market Share Overall Market Share
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Securities Lending and Financing business
21
Commercial Real Estate Lending business
JM Vikram
The real estate financing arm of JM Financial Limited, looks at providing an integrated
Financial
Limited
Pandit &
Associates financial solution to real estate developers – Major focus on real estate project financing
50.01% 49.99%
JM Financial Credit
Solutions Limited Lending book has grown from INR 1,844 crs in the beginning of FY 2015-16 to
` 4,150 Cr till June 2016
22
Highlights – Fund Based Activities
`Cr)
Loan book (` Net Interest Margin (%)
10,000
10 9.1
7,214 7,334 8.3
8,000 6,550 8.0 8.1
6,118 7.7
5,388 5,492 8 7.1
4,856 1,586 1,664
6,000 6.2
3,816 4,067 2,151 2,137 5.4
1,980 6 5.1
4,000 2,325 2,543
2,421 2,227 5,628 5,670
2,000 4,413 4
2,531 2,845 3,512
1,395 1,840 3,967
0 2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
FY15 FY15 FY15 FY15 FY16 FY16 FY16 FY16 FY17 0
Real Estate Capital Market Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17
40 37.3 3
35.0 33.9 34.0 2.6 2.5
32.3
3
28.8 27.6 2.1
30
2
21.3 21.5
20 2
1 0.9 0.9
0.8
10
1 0.3 0.3 0.2
0 0
Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17
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Borrowing profile
Business expertise translating into superior
• Capital Adequacy Ratio :
returns on funds deployed
27.6%
10.45%
8,000 11%
10.28% 6,671 6,586 10%
• Long term debt rating: 7,000
6,000 10%
CRISIL AA STABLE 4,721
10.11% 10%
5,000 4,196
ICRA AA STABLE 9.93% 10%
4,000 2,987 9.66%
3,122 10%
India Ratings AA STABLE 3,000
9%
Borrowing vs. Loan book translating into a NIM
9.38%
2,000 9% of 7.1%
1,000 9%
• Short term debt rating: 0 9%
CRISIL A1+ FY12 FY13 FY14 FY15 FY16 Jun-16
Short Term
• Group Borrowing & ALM Commercial
paper 2,957
committee meets regularly Cr 45% Non
to : Non convertible Commercial
convertible debentures paper 3,060
− review the ALM profile of debentures 1,192 Cr 18% Cr 46%
the group 1,184 Cr 18%
Real Estate
Significant increase in AUM – CAGR 20.0% As on June 30, 2016
• India focused fund with
investments in commercial, • Quarterly Average AUM (QAAUM): `12,756
residential, retail and
hospitality sectors
18,000 Cr
• Approx. 45% funds raised
from international investors 16,000
• Rank (QAAUM): 18 among 43 Mutual Funds
14,917
• AUM as on June 30, 2016 – `
233 Cr • Market Share: 0.89%
14,000
• No. of investments: 13 12,756
• No. of Exits: 5 full and 2 part
12,000 11,353 5,746 Reach
• Fully drawn down & invested
• Amount distributed till date
` 202 Cr. 10,000 • Servicing and investor base of around
6,503
140,385 through 17 branches and 81 Investor
Private Equity 8,000 6,975
Service Centres
6,585 6,561
6,283
• India focused long term PE • 17 schemes categorized under – Long Term
fund - providing growth capital 6,000
Debt, Short Term Debt, Balance, Equity
to fast growing, primarily
unlisted companies 9,171 Arbitrage and Equity
4,000
• Approx. 85% of funds raised 5,555 6,031 6,103
6,253
from International investors
2,000 4,378
• AUM as on June 30, 2016 - `
518 Cr
• No. of investments: 13 728 554 459
0
• No. of Exits: 7 full and 1 part FY12 FY13 FY14 FY15 FY16 Q1 FY17
• Fully drawn down & invested Equity (Rs. Cr) Debt (Rs. Cr)
• Amount distributed till date
` 689 Cr
• One of the well capitalized and profitable AMC in the industry
Note:
1. Equity AUM for FY16 and Q1 FY17 include arbitrage fund of Rs. 4,740 and Rs.2,993 Cr resp 26
Effective Risk Management Framework
Report of top risks and risk event update periodically placed before the Board of
4 Directors
Independent Internal Audit firms appointed to review and report on the business
5 processes and policies in all operating companies of the Group
27
Community Engagement
• At JM Financial, CSR
extends beyond a statutory
• JM Financial Foundation drives our community engagement initiatives that focus on –
obligation – Education – special focus on girl child education
– Healthcare
• Firm belief in strengthening – Entrepreneurship promotion
and uplifting the lesser
privileged communities – Vocational Training
– Women empowerment
– Disaster Relief
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Key Takeaways
Strong presence for over four decades – proven track record of growth & sustainability
Value driven growth – visible future growth roadmap, increased focus on Real Estate Lending,
Asset Reconstruction and Alternative Asset Management
Experienced & committed Management team - ensures future growth at minimal risk
Positive capital market outlook – strategically placed to benefit from every upswing
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Appendix
The content of this document are for information purposes only and does not construe to be any investment advice. Any action taken by you on the basis of the
information contained herein is your responsibility alone and JM Financial Limited (hereinafter referred as JM Financial) and its subsidiaries or their employees or
directors, associates will not be liable in any manner for the consequences of such action taken by you. We have taken due care regarding authenticity of the
information contained herein, but do not represent that it is accurate or complete in all respect. JM Financial or any of its subsidiaries or associates or their
employees shall not in any way be responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this
document. The recipients of this document should rely on their own judgement while taking any action based on the information provided herein.
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JM Financial Limited its Subsidiaries & Associates
JM Financial
Limited
Core
Investment
Holding Co.
JM Financial
JM Financial
JM Financial CR Retail Malls JM Financial Trustee
Overseas (India) Ltd.
Holdings Pvt. Commtrade 40% Insurance Company Pvt.
JM Financial
Ltd. Ltd Astute Broking Pvt Ltd
Capital (Rental of
Investments Ltd
(Mauritius Limited Property)
(Commodity (Trusteeship)
Investment
Advisor) Broking)
Total 18.26%
32