Indostar Capital Finance Limited · NSE:INDOSTAR
Indostar Capital Finance — Q1 FY2020 Earnings Presentation
38 slides from Indostar Capital Finance's earnings presentation, Aug 8, 2019
Slide 1: Q1FY20 Results Update
INDOSTAR CAPITAL FINANCE LIMITED Q1FY20 Results Update 8 August 2019
Slide 2: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”) have been prepared by IndoStar Capital Finance Limited (“IndoStar” or the “Company”) solely for information purposes and do not constitute an offer to sell or, recommendation or solicitation of an offer to subscribe for or
Slide 3: Q1FY20 performance: Key Highlights
Q1FY20 performance : Key Highlights ▪ Net revenue from operations ₹ 1,937 mn, +58% YoY ▪ Cost Income ratio 38.5%, reduced 560 bps YoY Strong revenue and profit growth ▪ Pre-provision Operating Profit ₹ 1,192 mn, +74% YoY ▪ Profit after Tax ₹ 471 mn, +50% YoY ▪ Partnership with ICICI Bank - innovativ
Slide 4: IIFL acquisition + ICICI Bank partnership makes IndoStar a formidable player in CV Financing
IIFL acquisition + ICICI Bank partnership makes IndoStar a formidable player in CV Financing ✓IIFL acquisition has increased IndoStar’s distribution footprint to 322 branches, 1934 employees, monthly disbursement capacity to ₹ 4,000 mn ✓ICICI Bank tie-up ensures on- tap liquidity for CV Finance busi
Slide 5: National Footprint
National Footprint • Well balanced distribution network • Integration & consolidation underway 322 branches across 18 states * Some branches have multiple operating segments 322 322 159 155 305 305 129 136 142 114 40 46 55 55 55 10 10 10 10 10 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 SME Finance Housing F
Slide 6: Q1FY20: Consolidated Profit & Loss Statement
Q1FY20: Consolidated Profit & Loss Statement Particulars (₹ mn) Q1FY20 Q4 FY19 QoQ % Q1FY19 YOY % Revenue from Operations 4,191 3,411 23% 2,343 79% Interest Expenses (2,253) (1,639) 38% (1,119) 101% Net Revenue from Operations 1,937 1,772 9% 1,224 58% People Costs 476 385 24% 323 48% Operating Expen
Slide 7: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (₹ mn) Jun-19 Mar-19 QoQ % Jun-18 YoY % Equity 30,591 30,063 2% 28,232 8% Borrowings 80,863 89,357 -10% 54,370 49% Others 1,159 706 64% 2,616 -56% Total Liabilities 112,613 120,126 -6% 85,217 32% Loan Assets 101,568 102,222 -1% 74,701 36% Treasury Assets 7,109
Slide 8: Q1FY20: Business Segment Performance
Q1FY20: Business Segment Performance Corporate SME Housing ^ Particulars (₹ mn) CV Finance Consolidated ^ Lending Finance Finance Revenue from Operations 1,676 1,506 587 220 4,191 Interest Expenses (883) (673) (341) (112) (2,253) Net Interest Income 793 833 247 108 1,937 People Costs 49 255 46 55 47
Slide 9: Diversified Funding Profile
Diversified Funding Profile Funding Mix - March 2019 Funding Mix - June 2019 Others Equity 12% 27% Equity CP Others 25% 2% 17% CP 2% Banks NCD Banks NCD 33% 26% 29% 27% Incremental Funding mobilized Strong Credit Ratings ₹ mn Q3FY19 Q4FY19 Q1FY20 Borrowing Type Rating Firm Ratings Banks 5,890 7,870
Slide 10: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars ₹ mn Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Opening Cash & Equivalents* 7,824 3,192 1,601 4,445 8,035 10,519 16,054 # Additional Funding 7,770 4,000 - - - - - Loan repayment inflows [Principal] 5,296 5,689 6,454 6,560 5,189 8,367 6,337 Total Inflo
Slide 11: Q1FY20: Quarterly Performance Trend (1/2)
Q1FY20: Quarterly Performance Trend (1/2) AUM (₹ mn) Loan Disbursements (₹ mn) On-book Loans Off-book Loans AUM Corporate Lending Retail Finance Total 117,352 115,792 22,606 20,280 74,701 77,665 77,482 15,130 14,224 7,257 13,047 12,357 975 8,675 8,546 102,222 101,568 7,570 74,701 77,665 76,508 15,34
Slide 12: Q1FY20: Quarterly Performance Trend (2/2)
Q1FY20: Quarterly Performance Trend (2/2) NPA* PAT (₹ mn) GNPA NNPA 739 2.9% 713 640 471 1.2% 2.5% 0.9% 0.9% 315 0.7% 1.0% 0.6% 0.6% 0.5% & & Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 & Including IIFL, Gross and Net NPA Q4FY19 2.6% & 1.7%; Q1FY20 4.7% & 3.7% * GNPA & NNPA
Slide 13: Asset Quality - Organic portfolio
Asset Quality - Organic portfolio Gross NPA (₹ mn) Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Corporate Lending 446 205 136 0 1,546 & CV Finance 0 0 11 59 190 SME Finance 438 455 574 545 677 Housing Finance 0 0 3 7 19 Total 884 660 724 611 2,432 & One asset turned NPA; confident of full recovery in FY20 12
Slide 14: IIFL CV portfolio - status update
IIFL CV portfolio - status update Credit Loss Protection (₹ mn) Mar-19 Apr-19 May-19 Jun-19 Jul-19 Portfolio O/S ...(A) 22,425 21,676 21,132 19,971 19,146 Gross NPA...(B) 2,167 2,789 3,435 2,461 1,858 ECL Provision...(C) 2,020 1,943 1,905 1,767 1,713 Credit Loss Protection… (D) = (C/A) 9.0% 9.0% 9.0
Slide 15: Corporate Lending: Conservative approach continues (1/3)
Corporate Lending : Conservative approach continues (1/3) Gross Disbursements (₹ mn) Corporate Lending AUM (₹ mn) 52,519 48,665 15,349 44,803 45,270 43,067 11,605 4,127 4,787 2,856 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 AUM Breakup: RE vs. Non-RE 100% 80% 48% 46% 44% 3
Slide 16: Corporate Lending: Continues to be highly profitable (2/3)
Corporate Lending : Continues to be highly profitable (2/3) Particulars (₹ mn) Q1 FY 19 Q2 FY 19 Q3 FY 19 Q4 FY 19 Q1 FY 20 Revenue from Operations 1,614 2,206 1,940 1,817 1,676 Interest Expenses (722) (836) (789) (790) (883) Net Interest Income 892 1,370 1,151 1,028 793 People Costs 44 67 23 108 49
Slide 17: Corporate Lending: Key ratios (3/3)
Corporate Lending : Key ratios (3/3) Q1 FY 19 Q2 FY 19 Q3 FY 19 Q4 FY 19 Q1 FY 20 Revenue from Operations * 13.4% 16.7% 15.7% 15.6% 14.7% Net Interest Income * 7.4% 10.4% 9.3% 8.8% 6.9% ✓ Consistent high profitability Operating Expenses * 0.4% 0.5% 0.2% 0.9% 0.4% Cost / Income 5.0% 4.9% 2.1% 10.7% 6
Slide 18: Retailisation Strategy continues with strong momentum
Retailisation Strategy continues with strong momentum Growing Proportion of Retail Lending in AUM and Disbursements AUM: CL vs Retail (%) Disbursements: CL vs Retail (%) 74,701 77,665 77,482 1,17,352 1,15,792 22,606 13,047 8,546 20,280 12,357 xxx 30% 32% 37% 42% 43% 61% 63% 61% 68% 67% 70% 68% 63% 5
Slide 19: CV Finance maintains momentum; SME and Home Finance volumes calibrated
CV Finance maintains momentum; SME and Home Finance volumes calibrated in line with our cautious outlook Retail AUM (₹ mn) Retail Disbursements (₹ mn) Significant growth in Retail AUM with IIFL acquisition 8,920 8,675 72,726 72,083 1,681 1,308 7,570 7,257 5,478 6,364 1,014 1,300 1,530 5,690 18,849 1
Slide 20: CV Finance: Continued momentum (1/3)
CV Finance : Continued momentum (1/3) CV Finance – Monthly Disbursement Trend (₹ mn) 2,807 2,452 1,728 1,600 1520 1510 1186 1,183 1,305 989 1,120 825 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 ✓ Sustained growth momentum in Q1FY20 ✓ Average monthly disburseme
Slide 21: CV Finance: Revenue growth driven by acquisition (2/3)
CV Finance : Revenue growth driven by acquisition (2/3) Particulars (₹ mn) Q1 FY 19 Q2 FY 19 Q3 FY 19 Q4 FY 19 Q1 FY 20 Revenue from Operations 103 234 346 542 1,506 Interest Expenses (38) (89) (139) (204) (673) Net Interest Income 65 145 207 338 833 People Costs 95 119 97 149 255 Operating Expenses
Slide 22: CV Finance: Key ratios (3/3)
CV Finance : Key ratios (3/3) Q1 FY 19 Q2 FY 19 Q3 FY 19 Q4 FY 19 Q1 FY 20 Branches & Employees Revenue from Operations * 16.1% 17.5% 17.1% 18.7% 16.8% Net Interest Income * 10.2% 10.8% 10.3% 11.6% 9.3% Operating Expenses * 31.7% 16.9% 10.6% 9.1% 4.4% 350 305 305 3,000 300 2,500 Cost / Income 311.4%
Slide 23: SME Finance: Moderated volume growth in Q1 (1/3)
SME Finance : Moderated volume growth in Q1 (1/3) SME Finance – Monthly Disbursement Trend (₹ mn) 1,468 1,177 921 499 530 560 575 440 465 344 344 250 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 ✓ Disbursement during Q1FY20 : ₹ 1,384 mn ✓ Direct assignment in Q
Slide 24: SME Finance remains Profitable (2/3)
SME Finance remains Profitable (2/3) Particulars (₹ mn) Q1 FY 19 Q2 FY 19 Q3 FY 19 Q4 FY 19 Q1 FY 20 Revenue from Operations 432 544 594 585 587 Interest Expenses (230) (284) (303) (309) (341) Net Interest Income 203 260 292 276 247 People Costs 53 56 40 38 46 Operating Expenses 20 21 21 23 24 Pre-p
Slide 25: SME Finance: Key ratios (3/3)
SME Finance : Key ratios (3/3) Q1 FY 19 Q2 FY 19 Q3 FY 19 Q4 FY 19 Q1 FY 20 Branches & Employees Revenue from Operations * 11.4% 12.5% 13.0% 13.3% 13.6% Net Interest Income * 5.3% 6.0% 6.4% 6.3% 5.7% Operating Expenses * 1.9% 1.8% 1.3% 1.4% 1.6% 77 76 86 84 98 Cost / Income 36.3% 29.9% 20.8% 22.3% 2
Slide 26: Housing Finance: Calibrated disbursements (1/3)
Housing Finance: Calibrated disbursements (1/3) Housing Finance – Monthly Disbursement Trend (₹ mn) 570 601 510 415 430 440 438 363 373 308 333 271 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 ✓Q1FY20 disbursements ₹ 1,014 mn ✓Direct assignment in Q1FY20 ₹ 234
Slide 27: Housing Finance: Continued Profitability (2/3)
Housing Finance: Continued Profitability (2/3) Particulars (₹ mn) Q1 FY 19 Q2 FY 19 Q3 FY 19 Q4 FY 19 Q1 FY 20 Revenue from Operations 36 80 133 189 220 Interest Expenses (16) (41) (63) (84) (112) Net Interest Income 20 38 70 105 108 People Costs 62 93 81 28 55 Operating Expenses 13 30 24 28 24 Pre-
Slide 28: Housing Finance: Key ratios (3/3)
Housing Finance : Key ratios (3/3) Q1 FY 19 Q2 FY 19 Q3 FY 19 Q4 FY 19 Q1 FY 20 Revenue from Operations * 14.4% 13.2% 14.3% 15.8% 15.7% Branches & Employees Net Interest Income * 8.1% 6.4% 7.6% 8.8% 7.7% Operating Expenses * 30.1% 20.4% 11.3% 4.7% 5.7% 391 418 370 354 324 Cost / Income 374.0% 320.1%
Slide 29: Our Strategic Priority: Build A Well-Balanced & Diversified Lending Institution
Our Strategic Priority: Build A Well-Balanced & Diversified Lending Institution Dream Drive Deliver To build a profitable, Become the “Go-To” NBFC Quality, Profitability & Growth diversified asset book for Middle India ✓ Continue to grow profitable corporate ✓ Be a catalyst in our customers’ ✓ Achie
Slide 30: Quick Snapshot
Quick Snapshot 1. First Indian NBFC 6. Robust Risk Management & promoted by Global PE Investors Scalable Technology Platform • Incorporated in 2011, sponsored by Everstone • Strong credit underwriting processes Capital and other marque investors • Active Board oversight • Listed on NSE & BSE in May-
Slide 31: Retail Lending: Focus on High Growth Segments
Retail Lending: Focus on High Growth Segments Commenced Retail Lending in 2016 with Focus on High Growth Segments CV Finance to be the primary growth engine, while Housing Finance and SME Finance to offer strategic leverage CV Finance SME Finance Housing Finance • Commenced in FY 2016 • Commenced in
Slide 32: Entrepreneurial Leadership Team with Strong Sponsor Backing
Entrepreneurial Leadership Team with Strong Sponsor Backing ✓ Several years of experience and in-depth understanding of the specific industry and geographic regions ✓ Separate business & credit heads for each vertical ✓ Strong alignment through large ESOP program (8.5% of diluted shares) ◼ 20+ years
Slide 33: Entrepreneurial Leadership Team with Strong Sponsor Backing
Entrepreneurial Leadership Team with Strong Sponsor Backing ◼ 24 years of experience with ◼ 20 years of experience financial Institutions with banks & financial ◼ 21 years of experience with banks Institutions & financial Institutions ◼ Previously worked with Fullerton India, Citigroup, ◼ Previously
Slide 34: Strong & Distinguished Board
Strong & Distinguished Board ✓ 13 committees composed of independent and non-independent directors and also employees1 ✓ Distinct and delineated responsibilities to ensure good corporate governance ✓ Strong capital sponsorship also providing access to best industry practices and international corpor
Slide 35: Robust Risk Management Framework
Robust Risk Management Framework Organizational Framework Aligned Strong Credit / Underwriting Processes Followed by to Mitigate Risk Robust Monitoring Mechanism Business National Credit National Ops 1 Structured Credit Appraisal / Approvals Head Manager Head • Corporate: Pre-screened by corporate l
Slide 36: Promoters Shareholding Structure
Promoters Shareholding Structure Everstone1 48.00 % 57.00% Indostar Capital3 100.0% (Promoter) IndoStar Capital Finance Limited 52.00 % Promoter Group4 Other Investors2 3.74% Strong capital sponsorship of Everstone Group 7 ‘Private Equity Firm of the Year in India’ India and SEA US$5.0bn focused AuM
Slide 37: Shareholding Pattern
Shareholding Pattern Shareholding @ 30 June 2019 Major Shareholders Promoter & Promoter Group Foreign Management Team and Employees* Company Body Trusts SBI MF 2.4% Corporates 1.8% 4.8% Lenarco (Advent) Others ICICI Prudential Life Insurance 8.7% Fidelity Emerging Markets Fund HDFC MF SBI Amundi Fun
Slide 38: For Further Queries
For Further Queries Pankaj Thapar Chintan Mehta CFO IR Consultant Contact No: +91 22 4315 7036 Contact No: + 91 22 6627 6571 Email – pthapar@indostarcapital.com Email – chintan.mehta@dickensonworld.com Amol Joshi Director - Finance Contact No: +91 22 4315 7090 Email - ajoshi@indostarcapital.com Raja
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