Announcement under Regulation 30 (LODR)-Investor Presentation

Presentaion on Financials

about 1 month ago

INVESTOR PRESENTATION

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Sentiments detected

Positive 39
  • Q1 FY23 – Financial Performance Highlights ✓ Total AUM up by 77% YoY & 13% QoQ to INR 13,880 Mn in Q1FY23

  • We have added more than ~50,000 new customers in Q1 FY23.

  • Operating expenses increased by 54% YoY to INR 185 Mn in Q1 FY23 as a result of expansion in MFI & MSME branches and ✓ recruitment of staff for the branch expansions.

  • Further the increase is also due to the growth in the loan portfolio.

  • Disbursements grew by 212% YoY to INR 3,800 Mn in Q1 FY23 ✓

  • FY22 Profit After Tax increased sharply to INR 157 Mn compared to INR 36 Mn in Q1 FY22 ✓ Provisions and write-offs (Impairment Losses on Financial Assets) during the quarter was INR 118 mn Cumulative Provisions stood at INR 699 Mn as on 30 th June 2022 (covering 5.04% of the total AUM, 5.33% on book)

  • A solid bounce-back performance for Q1FY23 on profitability, asset quality, disbursements and collections.

  • Update on Collections- Consistently improving for last five quarters

  • Update on Collections - ❑ Collections in all the segments were healthy and were aligned to its pre covid levels.

  • - Microfinance and MSME collections was healthy and reached 98.6% during June 2022 .

  • - 2W collections continued to be well-north of 96% during June 2022 ❑

  • Healthy Liquidity position with INR 758.4 Mn in cash/bank balance, liquid investments, and undrawn CC limits •

  • The company has duly repaid all the debt obligations that were due in Q1FY23 •

  • ALM continues to remain positive, and the company continue to have access to new sources of funds via CCD’s and OCRPS •

  • Disbursements picked up across all segments • Loan Disbursements during Q1 FY23 stood at INR 3,795 Mn up by 212% YoY and 12% QoQ. Disbursements picked up in all the businesses aided by Increase in number of branches and revival in demand in rural economy.

  • Result of which is healthy collection efficiency, which remains robust at above 98% for Q1 FY23.

  • Mn – higher by 84% vis-à- vis last year •

  • Q4 FY22 QnQ (%) FY22 Asset Under Management Disbursements 11,590 3,170 6310 98084% 222% 10,220 2,795 13% 14%10,220 8,401 Disbursements grew by 222% with opening of new, along with Other Income 3.8 0..0 - 0.0 - 1.5 increase in ticket size of second cycle borrowers Gross Total Income 576.7 363.2 59% 559.4 3% 1,730.4 ❖ Gross Total Income increased by 59% YoY to INR 576.7 Mn due to Finance Costs 229.9 160.7 43% 205.8 12% 728.6 higher average AUM Net Total Income (NTI) 346.8 202.5 71% 353.6 -2% 1001.8 ❖

  • Similarly, Net Total Income increased by 71% YoY to INR 346.8 Employee Benefits Expenses 86.4 66.8 29% 82.0 5% 290.5 Mn Depreciation and Amortisation 2.1 1.8 15% 3.1 -34% 8.5 ❖ Profit After Tax increased sharply to INR 96.2 Mn in Q1FY23 Other Expenses 36.4 1.68 116% 38.4 -5% 131.0 compared to ₹ INR 20.6 Mn in Q1FY22 on the back of strong growth Pre-Provision Operating Profit 222.0 117.1 90% 230.0 -3% 571.7 of loan portfolio and better operational efficiencies Total Provision & Write-offs 102.4 75.6 35% 98.1 4% 300.0 ❖ Provisions & write off for the quarter increased by 35% YoY to Profit After Tax 96.2 20.6 367% 97.7 -2% 184.5 INR 102.4 Mn •

  • Strengthened provision coverage by prudently earmarking INR

  • RoE, Yields and NIM % figures are annualized 22 - Q4 FY 22 yield is high on account of gain on securitization transaction of INR 1000 Mn with SBI in January 2022 13

  • MSME AUM increased by 59% YoY to INR 1,818 Mn on the back of revival in demand Particulars (INR Mn) Q1 FY23 Q1 FY22 YoY (%) Q4FY22 QnQ (%) FY22

  • Finance Costs 58.4 41.2 42% 41.4 41% 178.9 Net Total Income (NTI) 162.5 103.5 63% 168.8 -4% 314.5 ❖ Disbursements in MSME segment has picked up sharply with recovery in rural economy after bottoming out Employee Benefits Expenses 40.7 27.3 49% 36.2 13% 128.0 in May 2021 due to second wave of COVID.

  • % 0.7% 3.3% (260 bps 1.5% 1.5% 1.5% ❖ Repayment rates for both MSME and 2W were healthy and steady during the quarter at 95% & 96%

  • Funding profile is well diversified with increase in share of funds from NCDs & DFIs Q1 FY22 - Borrowing Mix %

  • Positive ALM (in Months) - Well-diversified borrowing mix with increasing share of NCD’s, ECB’s, DFIs 22 23 22 22 (NABARD Refinance, MUDRA) and Securitization 19 19 20 16 18 17 - Share of NCD’s, ECB’s, DFIs, and Securitization represented ~45% of borrowings in Q1 FY23 - Comfortable liquidity position with a potential to increase leverage.

  • is a diversified NBFC - Consistent rating upgrades backed by strong financial & operating focusing on large under-served rural & semi-urban retail markets performance – Currently rated BBB+ by CARE Ratings and ACUITE A- with stable outlook ▪

  • Segments ▪ High-Growth Trajectory (FY2016-22 CAGR) : ▪ Total Loan Assets of INR 13878 Mn in Q1 FY23 - AUM: 38% - Microfinance – 84.3% of AUM (via 100% owned ▪ Net Income: 34% subsidiary “Namra Finance”) ▪ Consolidated debt to equity ratio of 4.65:1 – Sufficient Capital - MSME Loans – 12.4% of AUM to drive growth going forward - 2-Wheeler Loans – 3.3% of AUM ▪ High Return Ratios - ROE: 15.6%; ROAA: 3.1% - fast recovering from the COVID impact Strong Retail Presence & Wide Distribution Network Efficient Liability Management - 308 branches; 55+ Two-Wheeler dealerships ▪ Comfortable Liquidity Position: Positive ALM - 110 Districts, 8 states ▪ Avg. lending tenor at origination: ~24 months; Avg. tenor of debt at origination: ~36 months ▪ ~5.2 lakh live customers ▪ Diversified Borrowing Profile with Relationship across 30+ Banks & other - Undertaken contiguous expansion from Gujarat since 2014 to Financial Institutions achieve geographic diversifications Note: •

  • Strong Growth in AUM & Disbursements….. Total AUM (INR Mn) 12,332 14000 •

  • Further, we recently launched a new product “Rural 2-wheeler 4000 10% 20% 4000 loans”(currently in pilot stage) to effectively meet the under-served market.

  • Higher ROA business offering immense growth potential 0 68% 61% • Plan to reduce share of MFI book in overall AUM to ~60% over time 0

  • While Maintaining Superior Cost Efficiency & Asset Quality Gross Income and Net Total Income (INR Mn)

  • Consistently high through cycle ROA / ROE

  • FY22 – Key Metrics (Mn) - Hypothecation (secured) loans given to self-employed / cash- 461 428 salaried customer in the informal segment in semi-urban / rural areas for a 2W

  • Disbursement (INR Mn) ▪ Currently operates only in Gujarat; across 55+ dealerships - Piloting new Rural 2W product: Operating in Tier 3-4 & below 133 68,000 locations for higher yields; higher ROA business; key growth driver going forward

  • FY22 – Key Metrics (%) - Increase in finance penetration - Geographical & new product expansion 28.9% 19.0% - Arman 2W & Rural 2W operating model – Yield NIM ▪ Focus on quick turn around time ▪ Excellent relationships with dealers and OEMs 6.9% 2.05% ▪ In-house feet-on-street model for rigorous collections GNPA NNPA 22 30

  • Credit bureau check (CRIF & CIBIL) ▪ Highest ROA product at Arman; focus on growing this business over time •

  • Collections • Door-to-door collection allows Company to maintain relations with customer and ensures high collection Yield NIM efficiency 7.9% 1.4% •

  • Microfinance: 5-Year Performance Well diversified across geographies Maintaining high operational efficiency

Negative 3
  • Q1 FY23 – Consolidated Profit & Loss Statement

  • Additionally, the company also NNPA % 0.2% 1.0% (80 bps) 0.6% (40 bps) 0.6% took an aggressive write-off of INR 48.6 Mn.

  • 2W AUM was flat at INR 471 Mn in Q1FY223as compared to INR 419 Mn in Q1FY212 registering a Gross Total Income 220.9 144.7 45% 210.2 5% 662.2 12% growth

Mentioned Phrases & Organizations

Important keywords detected (20+)

aum (55)
income (52)
avg (33)
total (29)
book (26)
financial (25)
loans (23)
figures (21)
aum book (21)
nnpa (20)
msme (19)
nim (17)
avg aum (17)
growth (16)
equity (15)
provisions (14)
bps (14)
gnpa (14)
disbursement (14)
gross (14)

Organizations identified (10+)

NNPA (9)
CIBIL (4)
GNPA (3)
ROAA (3)
ECB (3)
Avg (3)
MUDRA (2)
NCD (2)
CRIF Score (2)
AUM (2)

Tables extracted (8)

Business Segment Collections Due Amount Collected Collection Efficiency %Collections Due Amount Collected Collection Efficiency %Collections DueAmount Collected Collection Efficiency %
(Apr’22) (Apr’22) (Apr’22)(May’22) (May’22) (May’22)(Jun’22)(Jun’22) (Jun’22)
98% 98% 97% 96% Total Microfinance MSME Two-wheeler 828 653 143 32 812 642 139 31868 686 148 33 852 676 144 32 98% 97% 97% 96%916 722 159 34 904 714 157 33 99% 98% 98% 96%
ASSETSMarch 2022March 2021March 2022March 2021
Loans & Advances 10,576 7,432 Financial Assets Cash and cash equivalents Bank Balance Investments Other Financial assets 755 668 59 129 879 805 32 761,883 1,512 310 76 930 11 491 178 652 17
Total Financial Assets 12,187 9,224 Non-Financial Assets Current tax Assets (Net) Deferred tax Assets (Net) Property, Plant and Equipment Right To Use Asset Other non-financial assets 0 165 37 12 11 0 134 35 6 33,210 2,848 2 46 8 0 7 0 44 8 0 7
Total Non-Financial Assets 225 17763 59
Total Assets12,4139,4013,2742,907
LIABILITIES & EQUITYMarch 2022March 2021March 2022March 2021
Equity Share capital Reserves & Surplus 85 2,042 85 1,78385 1,325 85 1,193
Total Shareholders Funds Financial Liabilities Other Payables Debt Securities Total Borrowings Subordinated Liabilities Other Financial Liabilities 2,127 12 1,951 7,696 250 329 1,868 8 1,776 5,288 150 2421,410 0 673 1,057 50 50 1,278 0 648 835 50 50
Non-Financial Liabilities Current tax liabilities (Net) Provisions Other non-financial liabilities 27 12 10 49 9 12 Total Financial Liabilities 10,238 7,4640 4 31 1,829 1,583 4 4 37
Total Non-Financial Liabilities 49 7035 45
Total Liabilities & Equity12,4139,4013,2742,907
% of Total AUM83%13%3%1%
LTVUnsecuredCash flow & FOIR based65-85%60-80%
Ticket sizeCycle 1 & 2 - INR 20-30k Cycle 3+ - INR 20-45kINR 50-70kINR 30-55kINR 40-50k
Average Ticket sizeINR 35,000INR 70,000INR 52,000INR 45,000
Tenure18-24 months24 months12-36 months12-24 months
Yield (%)22-27%30-32%21-23%26-28%
Disbursement100% Cashless100% Cashless100% Cashless to dealer100% Cashless to sub-dealer
Credit Check"CRIF / Equifax Score JLG Model with Training, Home Visit, Life Style Appraisal""CIBIL & CRIF Score Detailed Cash Flow Assessment Home & Business Field Investigation"CIBIL / CRIF Score & Field Investigation"CIBIL / CRIF Score Detailed Cash Flow Assessment Field Investigation"
CollectionsCash collection at centre meetingDoor step cash collectionNACH / Direct DebitDoor step cash collection

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